Dismissal for Refusing to Vary Terms of Employment Was 'Unfair'

Khatun v Winn Solicitors Ltd

Ms Khatun worked for Winn Solicitors Ltd (the Firm) who, as part of their coronavirus (COVID-19) response in March 2020, asked 365 members of staff to agree to vary their employment contracts.

The variation would give the Firm the ability to either place staff on furlough, or to unilaterally reduce their wages and hours by up to 80%, potentially for up to 9 months, if required to help them navigate the impact of the pandemic. The employees were told that refusing to agree to the variation would lead to dismissal.

Ms Khatun, who was not one of the employees placed on furlough, was the only one to refuse to the contract variation. She told her employer that if it became necessary to furlough her or to reduce her hours at some point in the future, she would hope that discussion would be had with affected employees at that point. Ms Khatun was told over the phone the following day that she had been dismissed and, although she was sent written confirmation the same day, she was not given a chance to appeal the decision.

Why Was the Dismissal Unfair?

The tribunal did acknowledge that the Firm had "sound, good business reasons" for the variation, and therefore dismissing an employee for refusing to agree could fall under the potentially fair reason for dismissal of "some other substantial reason".  

However, whilst the reason for dismissal may have been a fair one, the tribunal held that the Firm had failed to follow a fair process for dismissal and overall this led to Ms Khatun succeeding in her claim for unfair dismissal. The Firm failed to engage with Ms Khatun over her refusal to sign the variation or to consider alternatives to dismissal.

Other significant factors considered by the tribunal included the size and resources of the Firm, who had a designated HR department, the terms of the variation were non-negotiable and the Firm did not engage with employees 'in a meaningful way' about them. The tribunal held that the Firm had acted too quickly in dismissing the claimant only two days after sending her the new terms.

Failure to offer her a right of appeal was also significant, as the extra time may have allowed for some reflection as to whether an alternative to dismissal could have been agreed.  

What Are the Key Elements of a Fair Process?

This case highlights the importance of following a fair procedure when seeking to vary employees' contractual terms and dismissing employees more generally. In these situations, employers should engage with employees in a meaningful way and explore alternatives to dismissal.

Furthermore, even though business need resulting from the pandemic did fall into the category of "some other substantial reason"

in this case, this is not to say that it will always and employers should ensure any business case for the proposed variation stands up to scrutiny. Finally,

 the tribunal in this case also noted that a right of appeal will be a relevant consideration in determining the fairness of a dismissal.

For further information, please contact Ellen Netto in our Employment Law team, on 07384 812798, or fill in the form below.