Employment Law Cases
Whether contract was varied or terminated
An employee’s contract had been terminated by the employer’s unilateral imposition of new terms and conditions.
Ms Jackson worked as a specialist research nurse, graded at band 6, for an NHS trust. As part of a restructure, the trust planned for band 6 posts to become ‘senior research practitioner’ posts and to reduce the number of posts. Existing staff would be invited to apply for the reduced number of available band 6 posts and undergo an assessment. If unsuccessful in that assessment, they would be slotted into new band 5 posts as ‘research practitioners’. If that happened, their pay would reduce (after being protected for two years).
Ms Jackson was unsuccessful in her application for the newly created band 6 role. On 3 December 2018 she was moved to the new band 5 role and presented with new terms and conditions to sign. She refused to do so and said she should be made redundant and paid enhanced redundancy pay instead since her specialist research role had diminished. The trust accepted that she had been dismissed for redundancy from her band 6 role and served notice. However she resigned before her 8-week notice period had expired. Because of this, the trust told her she was no longer eligible for enhanced redundancy pay under Agenda for Change (the NHS pay and grading system which was incorporated into her contract of employment).
Ms Jackson was successful in claims for unfair dismissal and a statutory redundancy payment before the tribunal but the success of her claim for a contractual redundancy payment under Agenda for Change depended on whether she could rely on Hogg v Dover College (the principle that a purported variation of a contract, done unilaterally, can be such as to amount, in reality, to a termination of one contract and its replacement by another) to demonstrate an actual dismissal date of 3 December 2018. The tribunal held that she could not, 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. Ms Jackson appealed.
Her appeal was allowed.
The tribunal had wrongly focused on the concepts of constructive dismissal. It should have carried out a proper before-and-after 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. Moreover, the tribunal’s observation that Ms Jackson was capable of performing the new role was irrelevant, as was the intention of the employer and the argument that Ms Jackson had not treated the imposition of the new contract as a dismissal. The only issue was whether the band 6 contract had been brought to an end. Because of the flawed nature of the tribunal’s reasoning, the case was remitted to a different tribunal to conduct the proper analysis.
From one point of view, this is simply the EAT putting right a mistake made by the tribunal. From another, it’s a useful reminder of the potential perils of a unilateral variation of contract. The scenario in this case was different from a ‘fire and rehire’ exercise, where the employer terminates a contract to offer new terms. Instead, this case offers guidance on when a contractual variation might be so significant as to amount to a termination.
Here the fresh tribunal needs to consider if Ms Jackson’s new role was significantly different in status and pay as to constitute a new contract. An employer doesn’t need to intend for the employment relationship to end for a termination to take effect in this way. Whether a contractual variation amounts to a termination is a matter of fact and degree. As such the greater the difference between terms and conditions before and after a variation, the more likely a tribunal is to find that a dismissal has occurred. Our Knowledge Hub contains a checklist of matters to consider when varying terms and conditions.