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To what extent will a variation of contract be viewed as a dismissal?
Sometimes during restructures, an employer offers to slot an employee into a new role as an alternative to dismissal. However, if the new role is on less favourable terms, the employee may refuse the change; in this scenario an employer will often consider terminating the contract of employment, offering to re-engage in the new role. If the employer is not risk-averse they could try to impose the change by unilaterally varying the contract of employment. This is risky because the case of Hogg v. Dover College [1988] ICR 39 ("Hogg") established that such a variation may amount to termination of the contract.
In the recent case of Jackson v University Hospitals of North Midlands NHS Trust The Employment Appeal Tribunal ("EAT") decided that an Employment Tribunal ("ET") incorrectly rejected an employee's argument that they had been dismissed on Hogg grounds. As part of a restructure to the Research and Development directorate, the employer 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).
The claimant employee was unsuccessful, and so did not get one of the new band 6 posts. The employer informed her of this outcome by letter dated 13 November 2018, also informing her that she would be slotted into one of the new band 5 roles with effect from 3 December 2018.
The employee raised a grievance alleging that she had been made redundant and that the band 5 role was not suitable, alternative employment. She had never accepted the band 5 post; the employer had unilaterally imposed this post. The grievance was rejected and the employee resigned on 28th December 2018. Her appeal against the grievance outcome was successful and the employer offered to give 8 weeks' notice of termination if the employee retracted her resignation. The employee agreed to do so but argued that notice had already been given by the employer on 3rd December 2018, the date of her appointment to the band 5 role. The employer disagreed, arguing that notice started to run from the date they expressly gave notice. As such the employee refused to retract her resignation
Amongst other things the employee claimed an enhanced redundancy payment, however under NHS terms, an employee forfeits such a payment if they leave before the end of their notice period. It was agreed by both parties that if a Hogg dismissal had occurred on 3rd December 2018, the Claimant would be entitled to an enhanced redundancy payment. At the first instance the Employment Tribunal decided that there was no Hogg dismissal, however the EAT was critical of this decision, finding that the ET had not undertaken 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. As such the appeal was upheld and remitted to a different Tribunal to decide if there was a Hogg dismissal.
In summary, not every variation of contract imposed by an employer will amount to a dismissal. It is for an ET to decide if the contract of employment has been varied to such an extent that it really amounts to the removal of one contract and it's replacement by another. As such the greater the difference between terms and conditions before an after a variation the more likely a Tribunal is to find that a Hogg dismissal has occurred.
Although restructures can be complex, our experienced employment team can help you to achieve your aims, whilst avoiding potential pitfalls.
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