Case study

Unfair dismissal when employee refuses to agree to employment contract changes

Unfair dismissal when employee refuses to agree to employment contract changes

An Employment Tribunal found a solicitor was unfairly dismissed for refusing to agree to changes to her employment contract. These changes would have given the employer the freedom to unilaterally reduce her pay and hours to 80% or place her on furlough.

The dismissal was unfair because of a lack of meaningful consultation and failure to reasonably consider alternatives to dismissal.

The facts

Following a downturn in work at the start of the Covid-19 pandemic, a firm of solicitors decided to place around half of its staff on furlough and require the remaining staff to cover the cases of the furloughed staff. The claimant, Ms Khatun, was one of the solicitors selected to continue working.

On Monday 23 March 2020 (shortly before the UK government announced the first coronavirus lockdown), Ms Khatun’s head of department met with her and told her about the firm’s plans. He said that everyone would need to agree variations to their contracts, which were non-negotiable, or face likely dismissal.

The following day, the HR Director emailed the contract variation to all staff, instructing them to sign and return it within 24 hours – or face likely dismissal. The Claimant replied saying she was unwilling to agree to the variation, as she was continuing to perform the job she had been contracted to do (and more). Additionally, Ms Khatun stated that if she were to be furloughed or any other unexpected situation were to arise, she would consider variation at that point.

The head of department then made a five-minute telephone call to Ms Khatun, in which she repeated her offer to consider variation, should the need arise in future. However, he simply reiterated the firm’s position (that the changes were non-negotiable), and that she would be dismissed if she did not agree.

Ms Khatun’s remote IT access was revoked at 2pm that day. When she queried this with the IT helpdesk, she was directed to contact her head of department, who informed her of her immediate dismissal. The Claimant brought a claim for unfair dismissal.

The decision

The tribunal found that the Claimant had been unfairly dismissed. It accepted that the firm had “sound, good business reasons” for the variation, and therefore had the potentially fair “some other substantial reason” for dismissing an employee who would not agree to it.

However, the tribunal considered the dismissal unfair in the circumstances of this case, due to lack of consultation and failure to reasonably consider solutions other than dismissal.

The firm’s directors had decided at the outset that the new terms were non-negotiable and that anyone refusing to sign would be dismissed. The Claimant’s attempts to discuss the matter had not resulted in any meaningful discussion, simply a re-stating of the firm’s position. The firm had acted too quickly in dismissing Ms Khatun only two days after sending her the new terms. It had also failed to offer any right of appeal, which might have provided an opportunity for both sides to cool off and reach an agreement.

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