Unfair dismissal

Changes to terms and conditions without agreement can lead to dismissals:

• the employer can dismiss employees by imposing substantially inferior contract terms in place of the existing employment contract (see the examples below);

• there can be a dismissal where the employee resigns in response to a fundamental breach of the employment contract (constructive dismissal); or

• the employer can dismiss the employee by terminating the employment contract because the employee refuses to agree to new terms and conditions (often at the same time as being offered a new contract containing the inferior terms and conditions — see “dismissal and re-engagement” below).

These dismissals may be fair or unfair, depending on the circumstances.

To carry out a fair dismissal, the employer must have a “fair reason” under section 94, Employment Rights Act 1996 (ERA) and must act reasonably when dismissing for that reason.

In most cases, employees need two years’ service to be able to claim unfair dismissal.

Unfair dismissal claims can sometimes be brought even if, after their dismissal, the employee has started work under the inferior replacement contract terms provided by the employer.