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News added on 24.05.2021

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Varying employment terms

Unfairly dismissed for refusing to accept changes to employment terms

An employment tribunal has found that a solicitor was unfairly dismissed for refusing to agree to changes to her employment contract which were part of her employer’s response to the coronavirus pandemic. Why?

In Khatun v Winn Solicitors Ltd 2021, the employer (a law firm) had required all its staff to agree to a change to their employment contracts to give it the right to place them on furlough or to unilaterally reduce their working hours and pay to 80% should the business need arise. Ms Khatun (K) wasn’t one of the staff earmarked for immediate furlough, but she was the only employee to refuse to accept the change. She stated that, if it became necessary to furlough her or to reduce her hours in the future, she would consider a contract variation at that stage. She was dismissed due to her refusal to consent.

The employment tribunal accepted that the potentially fair reason for K’s dismissal was “some other substantial reason” as the employer had sound, good business reasons for requesting the contract variation, but K’s dismissal was unfair because the employer hadn’t acted reasonably in all the circumstances in dismissing her for that reason. In particular, there was no meaningful consultation with her, and her employer had failed to reasonably explore alternatives to dismissal. It had decided at the start of the process that the new contract terms were non-negotiable and that anyone refusing to accept them would be dismissed. It had then dismissed K only two days after sending her the new terms. It had also failed to offer her an opportunity to appeal against the dismissal decision, which might have provided an opportunity for both sides to calm down, consider their respective positions and reach an agreement.

This case demonstrates the need to act reasonably in dismissing an employee for their refusal to accept contractual changes, even where those changes are a necessary response to the coronavirus pandemic. This includes following a fair dismissal procedure, incorporating full consultation, and considering all alternatives and compromises.

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