Does ‘slotting in’ an employee to a lower graded role as part of a restructure amount to an unfair dismissal?

Jackson v University Hospitals of North Midlands NHS Trust [2023] EAT 102

An employee can claim unfair dismissal where their employer has unilaterally imposed new terms and conditions on them that are so radically different from their existing terms that the employer is in fact ending the old contract and imposing a different one (Hogg v Dover College [1990] ICR 39, EAT). 

The EAT has recently considered an appeal about whether a nurse (Ms Jackson), who was ‘slotted-in’ to a lower-grade nursing post as part of a restructure, could rely on the Hogg principle to claim unfair dismissal and thereby be entitled to an enhanced redundancy payment under the Agenda for Change (AfC) nationally agreed contract provisions. 

Facts

J worked for an NHS Trust as a band 6 haematology research nurse. A restructure took place which reduced the number of band 6 roles, and J was unsuccessful in securing one of the remaining roles. The Trust informed J that she would instead be ‘slotted-in’ to a band 5 role, for which there were new terms and conditions.  J refused to sign the new contract and brought a grievance arguing she was redundant and entitled to enhanced redundancy pay.

In January 2019, the Trust accepted that J’s band 6 role was redundant and gave her 8 weeks’ notice of dismissal, which was due to expire on 22 March 2019. J then resigned with immediate effect stating that she considered herself to have been constructively dismissed. In response, because J had left her employment before 22 March 2019, the Trust said J had forfeited her entitlement to enhanced redundancy pay (NHS employees forfeit their right to enhanced redundancy pay if they leave their employment before the end of their notice period unless this is with the agreement of their employer).

The ET hearing J’s claims held that she had been unfairly dismissed by reason of redundancy and was entitled to statutory redundancy pay, However, it rejected J’s argument, in reliance on Hogg, that she was entitled to an enhanced redundancy payment.  The ET noted, amongst other things, that pay protection attached to the band 5 role and J had the skills to do the role, so the band 5 role involved ‘no radical change’, the Trust had not intended to dismiss J, and the fact she had raised a grievance was ‘inconsistent with her employment ending’.  J appealed.

The EAT upheld J’s appeal. The EAT held that the ET had erred when it took account of: (a) the fact that J had the skills to do the band 5 role – this was irrelevant to the question of whether it amounted to a ‘radical change’; (b) the fact J had  raised a grievance; and (c) the fact the Trust had not intended to dismiss J - because ‘In a Hogg scenario, there will be no such intention almost by definition; an employer who purports to vary a contract is most unlikely to desire dismissal’.  The ET had failed to consider whether J’s band 6 contract of employment had been brought to an end by the imposition of the new band 5 contract.

It is the consequence of the unilateral variation/imposition of radically different terms that matters, not the intention. The EAT has therefore sent the claim back to the ET to reconsider whether J was subjected to a ‘Hogg dismissal’.

As well as offering guidance for ETs considering ‘Hogg’ dismissals, this case highlights the difficulty an employer can get into when it tries to adopt an automatic ‘slotting in’ process in redundancy and restructure situations – an arrangement commonly used in NHS Org Change situations.   Employers need to exercise caution and consider the potential for an employee to assert that there has been a unilaterally imposed variation of their contract given the potential for dismissal claims (including constructive dismissal and wrongful dismissal) and noting the potentially significant financial implications for NHS employers given the enhanced redundancy pay entitlement in AfC.

If you would like support or guidance on an organisation change process, please do not hesitate to reach out to Hill Dickinson’s experienced Health Employment team, for advice and support.