Redundancy trial period and dismissal

East London NHS Foundation Trust v O’Connor

Whether notification that a role was being deleted amounted to a communication that the contract was being terminated on that date had to be determined in light of the wider context and all the facts of the particular case.

By virtue of ERA, s. 138, an employee will be entitled to an automatic four-week ‘statutory’ trial period in an alternative position if:

• they have been dismissed/given notice of dismissal by reason of redundancy
• they accept an offer of alternative employment before their old contract ends
• the new contract begins either immediately after the end of the previous contract or within four calendar weeks of the end of the old contract, and
• the terms of the new contract differ from their original contract (unless that difference is merely trivial)

Therefore, if there is no dismissal or notice of dismissal then there can have been no statutory trial period.

Background

Mr O’Connor worked for an NHS trust as a Psycho-Social Intervention (PSI) worker. In March 2017, as part of a restructuring, he was told that he was at risk of redundancy, with his current role of PSI worker due to be ‘deleted’ from 3 July 2017. The letter inviting him to a meeting to discuss possible suitable alternative roles stated that it was ‘likely’ that he would be issued with formal notice of dismissal on grounds of redundancy. No such notice was in fact issued. Mr O’Connor then began a trial of a different role of Care Co-ordinator on 3 July 2017.

The trial period was extended to 9 August 2017 to accommodate a pre-booked period of annual leave. At that stage, the trust had been prepared to confirm the success of the trial period and wrote to Mr O’Connor setting out details of his contractual terms, should he accept the role on a permanent basis, describing these as an amendment to his existing terms and conditions of employment. However, Mr O’Connor then went off sick and raised a grievance contending that the Care Co-ordinator role was not a suitable alternative and the trust agreed to extend the trial period further while this was dealt with. In November 2017, Mr O’Connor’s grievance was rejected, and he declined the trust’s repeated offer of the Care Co-ordinator role.

In December 2017, the trust dismissed Mr O’Connor but refused to make a statutory redundancy payment. It contended that the statutory trial period had ended on 9 August and it believed that the Care Co-ordinator role had been suitable alternative employment which he had unreasonably refused.

A tribunal held that the trial period was not a statutory trial period because the trust hadn’t dismissed Mr O’Connor before it offered him the alternative role. While he had been dismissed, this wasn’t until December 2017 and he was entitled to statutory redundancy pay. The trust appealed.

EAT decision

The appeal was dismissed.

For there to be a dismissal, an employer must communicate to an employee that it is terminating the contract – and that it is doing so with effect on a date which is either expressly stated or unambiguously ascertainable from the communication. There cannot be a dismissal unless the employer communicates such a date. The communication may be by express words (oral or written) or it may be by words or deeds which convey that the employer is dismissing, on an identified, or uniquely identifiable, date. But, if it is other than by express words, and in particular if it is by some other form of conduct, the nature of the conduct must be such as to unambiguously convey that the employment is being terminated – it must be conduct which is not consistent with any other meaning or interpretation.

Mr O’Connor was notified, and knew, that his role was being deleted. He was specifically employed in that role. But there is no rule of law that notification of such a ‘deletion’ inevitably amounts to a notice of dismissal. It depends on all the surrounding circumstances. The tribunal had properly considered all the relevant communications and circumstances and was entitled to find that Mr O’Connor had not been ‘dismissed’ on 3 July and that therefore the trial period which began immediately afterwards was not a statutory trial period. The EAT sent the case back to the tribunal to consider whether the December 2017 dismissal was for redundancy and whether a redundancy payment was due.

Link to judgment: https://www.bailii.org/uk/cases/UKEAT/2019/0113_19_2910.html

Comment

Employers often overlook the technical requirements of the statutory trial period, particularly the need for there to have been a dismissal or notice of a dismissal and the inability to extend the trial period beyond four weeks for anything other than training. An employer extending it for longer runs the risk that any subsequent dismissal will be found to be for capability and not related to the redundancy – a prospect now faced in this case.