Garside and Laycock Limited v Booth UKEAT/0003/11

Garside decided that in order to avoid redundancies it needed to cut its workforce’s salary.  Mr Booth who had been employed 7 years was only one of two employees who refused to agree to a 5% pay reduction.  When he refused to accept a new contract with his new terms and conditions including the reduced pay he was terminated and his appeal against termination was unsuccessful.  He was successful however before a Tribunal in his claim for unfair dismissal.  Although the reason for his dismissal was “some other substantial reason”, the Tribunal held Garside had failed to show that it was fair in all the circumstances.  On appeal the Employment Appeal Tribunal disagreed and remitted the case to a fresh tribunal to determine whether the dismissal was fair.  The tribunal had focused on the reasonableness of the employee’s refusal to accept the change rather than on the reasonableness of the employer’s decision to terminate. 

The question for the new tribunal will be in light of the reason for the termination was it fair or not fair to dismiss the employee having regard to all the circumstances, equity and the merits of the case.   

Key point:  Employers do not have to show that their business reason for making a change was special or extraordinary.  Where employers deal fairly with their employees in seeking their agreement to the change, a single employee’s refusal to accept the change may not be unfair.