This case concerns an appeal against the Employment Tribunal, which had found the appellants to be unfairly and constructively dismissed. The Appeal Tribunal had substituted this for a finding of fair dismissal, on the basis of s98 (1) (b) of the Employment Rights Act 1998. This is the decision which is appealed.
The appellants were employed by a company specialising in sub-contract work for the railway and construction industry. It suffered a serious decline in business, and to try to avoid the cost of redundancies, reduce labour costs and offer more competitive tenders, the respondents rescinded the terms of the appellants’ employment contracts, so that their weekly minimum salaries were stopped, and that they would now be employed on the basis of whenever the employer needed them, bearing in mind the employer was under no obligation to use them. It was also stipulated in the new terms that if no work was given to the employees for 2 months, they would be issued P45s. These changes were communicated to them with 12 weeks notice.
The Employment Tribunal looked at the facts and observed whether the reasoning of the employers could be construed as ‘some other substantial reason’ (98(1) (b) of the Employment Rights Act 1998). It was found that there had been ‘good sound reason’ for removing the minimum weekly pay, but not ‘good, sound reason’ for removing the appellants’ employment status. Therefore, they found that this was to be considered Unfair Dismissal, as the appellants were left with ‘no rights’.
The Employment Appeal Tribunal found however that there had been ‘good business reason’ for the respondents’ decision, and that it had in fact been a fair dismissal. This decision was appealed on the view that the EAT had had no consideration for the balance of interests between the respondent and the appellants, and didn’t consider whether the dismissal was in ‘accordance with equity’ (s94 of the 1996 Act). It was also found that the EAT had basically found that because the respondents hadn’t believed they were doing anything wrong, they could not be found to have acted unreasonably. On the basis of this, the appeal was allowed. http://bit.ly/17NfERg
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