Slade and Others v TNT (UK) Ltd UKEAT/0113/11

In 2009 TNT decided to discontinue a bonus for 470 employees at one of its locations, and sought to negotiate its removal with a trade union and in due course a final offer was made to those employees.  The union conducted a ballot and by a narrow majority the employees rejected it.  It was in response to this rejection that TNT gave formal notice of termination of the contracts of service of each of those employees coupled with an offer of immediate re-engagement on the same terms as before but excluding the bonus. 

All the employees who had been dismissed accepted re-engagement on the new terms but under protest and reserved their right to claim that their dismissal had been unfair.  TNT through ACAS settled the unfair dismissal claims of all those employees (by means of a payment that was greater than the buy-out payment which had been offered in negotiations with the trade union) save for 183 of the original 470 employees.  Four test cases were then brought.  It was held that where the employees had been warned that refusal would result in a dismissal with an offer of a re-engagement on the proposed new terms,  TNT had not acted unfairly when the terms of re-employment did not include the terms of the buy-out.  What TNT did was within the band of reasonable responses to the position it found itself in. 

Key Point: The case is helpful for an employer which is planning to change terms of employment and is looking to buy out certain existing terms.  If there is no benefit of an agreement for which a lump sum had been offered there is no reason to include that lump sum in the new terms.