Hello and welcome to our case of the week. This week, we look at the importance of maintaining proper procedures in the dismissal process (even in exceptional times such as last year).
Ms A Khatun (the Claimant) was employed as a solicitor by Winn Solicitors Ltd (the Respondent). The Respondent are a Newcastle based law firm, specializing in road traffic accident litigation.
In the days preceding the first national Covid-19 lockdown, the Respondent decided that:
50% of its staff would be furloughed on 80% of their wages; and
The other 50% would be retained, subject to them adopting the work of their furloughed colleagues and agreeing to a contractual variation allowing the Respondent to unilaterally reduce their pay by 20%, subject to business needs.
These measures were taken in response to a reduction in new business (as fewer vehicles were on the road). One of the Respondent’s Associate Directors said of them: “double or triple the graft for the same cash as those watching Netflix in the garden is a very bitter pill.” We are inclined to agree.
It was a foregone conclusion that the Claimant fell into category b): she was an experienced solicitor with a track record of strong performance and could therefore manage the increased caseload.
However, she did not jump at the opportunity. The day after receiving notification of the Respondent’s intentions, she emailed its HR director, saying:
“I am sorry, but I cannot agree to a variation of my contract. I feel that I am continuing to deliver the job I am contracted to, if not more (as I now have double the work to do). These are uncertain times and I do not feel conformable allowing Winns to effectively reduce my pay. In the event that I am furloughed, or any other unexpected situation arises, I will of course consider a variation at that point.”
The Respondent’s HR Director then forwarded the email to one of its Associate Directors. He replied with: “if she does not sign, her employment will be terminated on Friday”. The HR Director urged the Claimant to sign again and was met with a similar response. The Associate Director then telephoned the Claimant to inform her that the Executive Directors had “taken the decision that if anyone doesn’t agree to it then they will basically proceed straight down the dismissal route as I understand they have received advice that it’s not unfair in light of the pandemic.” The Claimant reiterated her position that such action was eminently unfair and expressed her interest in engaging in discussion with the Respondent but was told there were no expectations and if she did not agree, she would be dismissed by Friday.
The next day, the Respondent’s Director and COO instructed HR to terminate the Claimant’s contract of employment. By 2:00pm, her IT access had been cut off, serving as her notification of dismissal (confirmed upon calling the Respondent’s HR Director). The Claimant subsequently brought a claim for unfair dismissal.
The tribunal accepted that the reason for dismissal was the Claimant’s failure to agree to the contractual variation, and it accepted that this constituted “some other substantial reason” for the purposes of the ERA. The sticking point, however, was whether the Respondent acted reasonably in treating this as grounds for dismissal.
Of particular importance was procedure. The judge noted the apparently foregone conclusion that failure to unflinchingly agree to the contractual variation would result in dismissal. This, he said, precluded a proper consultation.
He reiterated Lord Bridge in Polkey:
“an employer having prima facie grounds to dismiss for a potentially fair reason will in the great majority of cases not act reasonably in treating the reason as a sufficient reason for dismissal unless and until he has taken the steps, conveniently classified in most of the authorities as ‘procedural’, which are necessary in the circumstances of the case to justify that course of action.”
In other words, a lack of proper consultation will render a dismissal unfair. This is so, even in the exceptional circumstance of Covid-19. The employer could have at least attempted to engage in meaningful discussion with the Claimant. Instead, it treated her lack of complete assent as grounds for dismissal.
The employment judge said: “I did not detect even a hint of any reasonable process being followed. Indeed, when I asked Mr. Dewar (an Associate Director of the Respondent’s) whether his evidence was just that (that there would be no process before dismissal), he answered, “Yes – if they didn’t agree the sanction would be applied.”
He went on to note the COO’s comments that he was “fuming” with the Claimant for not agreeing to the variation and said that this “tends to militate against a fair and reasonable approach as is referred to in section 98(4) of the ERA.” Hence, the judge found the dismissal unfair.
The Takeaway Point
The judgement serves as a reminder of the importance of maintaining fair and reasonable procedures throughout the dismissal process. This is so even in circumstances that may appear to justify expediting them (such as the ensuing panic of March 2020).