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Unilateral demotion was considered breach of employment in unfair dismissal claim

on Friday, 01 March 2024.

An Employment Tribunal was wrong to conclude that a band 6 NHS employee’s reassignment to a band 5 position following a restructure did not breach an express term of his contract of employment for the purposes of his unfair dismissal claim.

What were the facts of the case?

In Humby v Barts Health NHS Trust, the claimant was employed by the Trust in a band 6 NHS role. A restructure was proposed, which involved reducing the number of band 6 roles. The claimant was unsuccessful in obtaining a band 6 role and was given notice that he would be moved to a band 5 role.

The claimant disputed the Trust's right to unilaterally change his contract. He said he had no alternative but to leave but that he might be willing to work longer than his contractual notice period of six weeks.

Ultimately, the claimant left within his six week notice period. He brought an Employment Tribunal claim for constructive dismissal.  The Tribunal dismissed the claim and he appealed to the Employment Appeal Tribunal (EAT).

EAT decision

The EAT allowed the appeal and readmitted the case to a new Tribunal for a re-hearing. The Tribunal had been wrong to conclude that this unilateral demotion was not a breach of the claimant's contract. The Tribunal had incorrectly focused on whether the Trust had breached the implied contractual term of mutual trust and confidence. However, the contract contained an express term stating that the claimant would be employed at band 6, at the band 6 rate of pay. This was an error which meant that the Tribunal's conclusion that there had been no repudiatory breach of contract was unsafe.

The EAT also found that the Tribunal should have, of its own accord, considered whether the Trust's actions amounted to a dismissal. The claimant was a litigant in person and it was understandable that he would not have identified that in some circumstances a unilateral contractual amendment can be so significant as to amount to termination of the original contract.

Finally, the Tribunal had been wrong to find that in offering to work slightly longer than his contractual notice period, the claimant had affirmed the contract. Although this might well have been the case on the evidence, the Tribunal had not taken account of the relevant circumstances which were that the claimant had been unsure of the length of his notice period and was concerned about the implications of COVID-19.

Learning points

This case acts as a useful reminder that a unilateral demotion could constitute a dismissal in law. Employers seeking to mitigate the risk of a successful unfair dismissal claim should ensure they follow a fair process before making such a change, and should consider the possibility that this could be a dismissal and re-engagement in law.

For more information or advice, please contact Zahra Gulamhusein in our Employment team on 020 7665 0868, or complete the form below.

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