Slade & Others v TNT (UK) Ltd

In assessing the fairness of dismissal for a contractual change, the tribunal must consider all relevant circumstances. Where dismissal is linked to an offer of re-engagement, the terms of re-engagement fall within that enquiry. An employer is not necessarily required to include in those terms a lump-sum payment previously offered to secure agreement to the change, particularly where the agreement and its associated benefits were not obtained. The question remains whether the employer acted within the band of reasonable responses. The assessment is fact-sensitive and has no universal formula.

The appeal arose from four test cases among 183 unfair-dismissal claims. The employer sought to remove an existing end-of-sort bonus after negotiations and workforce ballots failed. It terminated the employees’ contracts and offered immediate re-engagement without the bonus. The Employment Tribunal dismissed the claims.

The appellants challenged the tribunal’s approach to fairness, its treatment of the previously offered buy-out payment, and its reasons for finding the dismissals of non-loading-bay operatives fair. The central issues were whether the tribunal applied the correct test under section 98(4) of the Employment Rights Act 1996 and whether its reasons were sufficient.

1. Grounds 1 and 2 dismissed. The Employment Tribunal applied the correct question under section 98(4) of the Employment Rights Act 1996: whether the employer acted reasonably, within the band of reasonable responses, in the circumstances.
2. The tribunal was entitled to undertake a balancing exercise between the employer’s business objectives and the employees’ adverse interests. Its findings showed that it had considered the negotiations, the business reasons for removing the bonus, and the resulting hardship. Its conclusion was sufficiently reasoned.
3. The fairness enquiry was not confined to the dismissal in isolation. Because dismissal and immediate re-engagement were explicitly and intimately linked, the terms offered on re-engagement were relevant circumstances.
4. There was no obligation to include the buy-out lump sum in the re-engagement terms. The payment had been offered to secure agreement and the benefits associated with agreement were not obtained when the workforce rejected the proposal. The employer could reasonably withhold the payment while retaining it as a possible means of settling litigation.
5. The assessment is wholly fact-sensitive. There is no one-size-fits-all formulation.
6. Ground 3 allowed in part. The tribunal’s reasons concerning the non-loading-bay operatives were inadequate. It had not sufficiently addressed their greater loss, the historical non-consolidation of part of the bonus, the relevance of the proposed later review, or disputed evidence about the reduction in earnings. The claims of Mr Webster and Mr Brown were remitted to the same tribunal to amplify its reasoning within 42 days. Any continuation of the appeal was subject to the directions stated in the judgment.

• Employment Appeal Tribunal: appeals dismissed on grounds 1 and 2. Appeals by the non-loading-bay operatives on ground 3 allowed to the extent that their cases were remitted to the same Employment Tribunal for amplified reasons.
• Employment Tribunal: dismissed the four unfair-dismissal claims in a decision promulgated on 23 December 2010.