The EAT has confirmed that, in deciding whether it was fair to dismiss an employee for refusing to take a pay cut, the issue is whether it was reasonable for the employer to dismiss and not whether it was reasonable for the employee to accept the pay cut. It is not necessary for the employer to show that the survival of the business depends on the pay cut being implemented, but the "equity" of dismissing (with its implied sense of fair dealing in the circumstances) must be considered. This may include factors such as whether the pay cut is being applied to management as well as the rest of the workforce, and the process by which the pay cut is negotiated (eg, whether the reasons used to persuade the rest of the staff to accept were legitimate). (Garside v Booth, EAT)
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Unfair dismissal: whether pay cut proposals apply to management as well as staff could impact on fairness of dismissal for refusing pay cut
- Herbert Smith Freehills LLP
- Adam Brown, Anna Henderson, Peter Frost, Andrew Taggart, Tim Leaver and Jemima Coleman
- United Kingdom
- August 5 2011
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