Varying the terms of an employment contract amounted to a dismissal

A band 6 research nurse has won her case at the Employment Appeal Tribunal. Following a restructure, the number of band 6 specialist research posts were reduced leaving a smaller number of band 6 posts and the remainder being at band 5. Existing staff were invited to apply for the band 6 posts and if unsuccessful, were told they would be allocated to band 5 posts. The Claimant was unsuccessful in applying for a band 6 post and was moved to a band 5 role and given a new contract.

The employee argued that she should be made redundant since her specialist research role had diminished. Had this occurred, she would have been entitled to significantly enhanced redundancy terms, offered by her NHS Trust.

The Trust refused to make her redundant and she raised a grievance, arguing that she had never accepted the band 5 post and that it had been unilaterally imposed. The Trust rejected her grievance and the Claimant resigned. Her grievance appeal was successful however, and the Trust offered to give 8 weeks’ notice of termination if she retracted her resignation and stated that she was no longer entitled to enhanced redundancy pay.

At an Employment Tribunal it was found that the Claimant had been unfairly dismissed and she was awarded statutory redundancy payment but her claim for contractual redundancy pay was rejected. The Tribunal held that the contractual change between a Band 6 role and a Band 5 role was not radical enough to have amounted to a dismissal, that had the skills to undertake the band 5 role and that the trust had not ever intended to dismiss her. The tribunal held that the Claimant had therefore forfeited her entitlement to the contractual redundancy payment.

However, at a subsequent EAT it was held that the tribunal was wrong to find that there was no dismissal, concluding that the tribunal should have done a proper comparison of the band 6 post against the band 5 post to ascertain whether the new terms were sufficiently different to amount to a withdrawal of one contract and replacement by another.

The case has been remitted to a different tribunal and the EAT decision reminds us that careful consideration must be given before varying contracts of employment, where the differences are sufficiently significant to amount to a dismissal!

Should you be considering a restructure or contract variation and feel you require advice, contact us at enquiries@121hrsolutions.co.uk.

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