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Northern Ireland
SW Global Resourcing Ltd v Docherty and Jones [2012]
Published on: 06/07/2012
Issues Covered:
Dismissal
Article Authors The main content of this article was provided by the following authors.
Background The appellant employer appealed against a decision by a tribunal that it had unfairly dismissed the respondent welders. The respondent‟s terms and conditions provided for a guaranteed minimum weekly wage. However, the business was struggling to stay afloat and the employer held several meetings with the respondents to discuss the fact that it could no longer pay the guaranteed wage.The respondents were asked to sign revised contracts which set out that they were not guaranteed a minimum weekly wage or a minimum number of hours of work each week, and that if no work was undertaken for two months their contracts would be terminated. The respondents refused to sign the new contracts and resigned claiming constructive dismissal on the basis that there had been a fundamental breach of contract, namely a breach of the term guaranteeing minimum payment. The tribunal found that the revised terms and conditions meant that the respondents would no longer be employees, although the employer was apparently not aware of this. The tribunal also found that the employer had fundamentally breached the contract and so had also breached the implied term of mutual trust and confidence, even though it had good, sound, non-arbitrary business reasons for withdrawing the guaranteed pay. Furthermore, the tribunal held that even if the dismissals were for "some other substantial reason", dismissal was not within the range of reasonable responses because there had been no consultation about changing the respondent's employment status.The EAT allowed an appeal from the employer and held the following:1. The tribunal were correct in concluding that the revised terms and conditions would have changed the respondent‟s status from employee to worker.2. The tribunal appeared to have erroneously proceeded on the basis that because the employer fundamentally breached the contract in relation to pay, it had also necessarily breached the implied term of trust and confidence. But, that does not follow. In particular, it did not make sense as the tribunal had simultaneously held that the cause of the employer's decision to withdraw the guaranteed pay was for good, sound business reasons that were not arbitrary.3. The tribunal had also erred in concluding that the employer had not shown that dismissal was for "some other substantial reason". The tribunal had already found 58that it had good reasons for acting as it did and so the dismissals could only be found to be fair.4. The tribunal's conclusions on reasonableness were also flawed. The employer had engaged in full consultation regarding the need to cut costs, particularly by removing the guaranteed payment to the respondents. It could not reasonably have been expected to consult the respondents on the potential of changing status.http://bit.ly/TFkaMU

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Disclaimer The information in this article is provided as part of Legal Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article. This article is correct at 06/07/2012
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