Dismissed? Employers should be aware of unfair dismissal claims
11th September 2008
A recent case highlights the importance of ensuring that employers, offering variations to an employment contract, do not actually dismiss and re-engage employees leaving them open to potential unfair dismissal claims.
In the case of Darby & Still v Law Society of England & Wales, the employer wanted to remove the employee’s contractual entitlement to company cars. The employer had intended to agree a consensual variation with the employees with a threat of dismissal if such variation could not be achieved. The employer sent the employees letters referring to termination of employment and re-engagement. The employees eventually signed new terms without the previous company-car provisions, but thereafter claimed unfair dismissal.
The Employment Tribunal found that the new terms had been achieved by agreement to vary rather than termination. However, on appeal, the Employment Appeal Tribunal was satisfied that the only proper construction of the letters between the employer and the employees was that the employees had been dismissed by notice in writing and then re-engaged on less favourable terms. The EAT noted that the correct approach to take would be:
“to consider whether on a reasonable construction of the documents...they constitute notice of termination of the current contract of employment with the prospect of re-engagement or whether, as contended for the employer, they constitute an invitation to agree a consensual variation with a threat of dismissal if such consensual variation be not achieved...".
As a result, the EAT sent the case back to the Employment Tribunal to consider whether the employees had been unfairly dismissed.
This case reminds all employers to ensure that correspondence to employees, which aims to vary the terms and conditions of employment, is carefully drafted in order to avoid any unintentional dismissals and consequently, unfair dismissal claims.
For more information, please contact:
Glasgow: Paul Brown or Michael McLaughlin - tel: 0141 228 8000
Edinburgh: Alan Strain - tel: 0131 226 5541
The information contained in this article is given for general information only and does not constitute legal advice on any specific matter.