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Can the variation of an employment contract amount to a dismissal?

Varying a contract amounts to a dismissal when the variation is, in reality, a replacement of the existing contract, the Employment Appeal Tribunal has confirmed.

Facts

Ms Jackson began work for the North Midlands NHS Trust as an acute care research nurse before moving into a more specialist role of band 6 senior haematology research nurse. 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, they would be slotted into new band 5 research practitioner’s posts. The Claimant was unsuccessful in her application for a band 6 post and was moved to a band 5 role and given a new contract to sign.

Ms Jackson refused to sign the new terms and conditions and argued that she should be made redundant on enhanced Agenda for Change terms and paid enhanced redundancy pay instead since her specialist research role had diminished. These terms provide that in the event of a dismissal by reason of redundancy, redundancy pay would not follow the statutory formula but instead be calculated on the basis of one month’s pay for each complete year of service. In Ms Jackson’s case, this amounted to £36,644.

The Trust refused to make her redundant and she raised a grievance that the band 5 post was not suitable alternative employment because it was a more generic role which did not require the specialist skills. She argued she had never accepted the band 5 post; the Trust had unilaterally imposed this post. The Trust rejected her grievance and the Claimant resigned.

Ms Jackson appealed the rejection of her grievance, and her appeal was successful, and the Trust offered to give 8 weeks’ notice of termination if Ms Jackson retracted her resignation. Ms Jackson agreed to withdraw her resignation but maintained that notice had already been given by the Trust on 3rd December 2018, the date of her appointment to the band 5 role. The Trust disagreed, arguing that notice started to run from the date they expressly gave notice. As such Ms Jackson refused to retract her resignation.

The Trust told Ms Jackson that, because she had left before the expiry of her notice, she was no longer entitled to enhanced redundancy pay. Ms Jackson brought a claim in the Employment Tribunal for unfair dismissal, redundancy pay and notice pay.

Employment Tribunal findings

The Tribunal held that Ms Jackson had been unfairly dismissed and awarded her a statutory redundancy payment. It however rejected her claim for contractual redundancy pay. The Tribunal considered that the success of her claim for contractual redundancy pay under Agenda for Change depended on whether she could rely on Hogg v Dover College (the principle that, in circumstances where an employer decides to unilaterally impose a change to terms and conditions of employment on an employee, that employee can continue to work under the new terms and conditions whilst also asserting that they have been “dismissed” from their old contract, and can therefore claim unfair dismissal on this basis).

The tribunal held that Ms Jackson was not subject to a ‘Hogg’ dismissal, citing the fact that the change was not radical enough, Ms Jackson had the skills to undertake the band 5 role and that the trust didn’t intend to dismiss her. The tribunal held that Ms Jackson had forfeited her entitlement to the contractual redundancy payment.

Employment Appeal Tribunal

The EAT upheld Ms Jackson’s appeal and found that the tribunal was wrong to find that there was no Hogg dismissal on 3 December 2018. The EAT found that the tribunal had wrongly focused on the concepts of constructive dismissal and had wrongly considered that Ms Jackson’s subsequent grievance was inconsistent with her contract having already ended. The EAT considered that the tribunal should have done a proper comparison of the band 6 post and the band 5 post to ascertain whether the new terms were of sufficient difference to amount to a withdrawal of one contract and its replacement by another.

Due to the flawed nature of the tribunal’s reasoning, the case was remitted to a different tribunal to conduct a proper analysis of whether there has been a ‘Hogg’ dismissal.

This is an interesting case which serves as a reminder that careful consideration needs to be given before contractual variation is contemplated in circumstances where the differences could potentially be significant enough to amount to a dismissal.