Employee was constructively dismissed, rules EAT

In Argos Ltd v Kuldo, the Employment Appeal Tribunal (EAT) has found that an employee was constructively dismissed when she was moved onto a different role instead of being subject to appropriate redundancy procedures.

The claimant in this case was employed as a Costs Manager at Argos when it was acquired by Sainsburys. As a result of this business acquisition, she was informed that her role was at risk of redundancy but that she, along with a colleague, was being considered for the role of Central Costs Manager. At this time, she was provided a job description, alongside information about a proposed collective redundancy process. She was eventually told she would be given this role.

Argos maintained a procedure where employees could be ‘mapped’ into similar roles if this role was only 30% different at the most. Whilst they argued that the new role fell into this bracket, the claimant disagreed. In writing, she outlined that it offered less responsibility, less status and too much of a change in her daily duties. Argos treated her concerns as a grievance and ultimately rejected it, informing her that she was to move into the new role.

The claimant later brought claims to the Employment Tribunal (ET), including unfair dismissal and failure to provide redundancy pay. The ET upheld her claim for constructive unfair dismissal. In forming their decision, they agreed that the new role offered had been significantly different to the old one and Argos had failed to properly assess how the 30% rule should be applied. They also found that, as Argos had failed to properly consult with the claimant, they had breached the implied term of mutual trust and confidence. As the claimant had resigned in response to these breaches, she was constructively dismissed.

The ET postponed the redundancy pay issue to a remedy hearing.

Argos appealed on numerous grounds. They argued that the ET had failed to consider if the organisation had acted reasonably in the circumstances. They also stated that the ET had misinterpreted the law in finding the new role was not a suitable alternative role.

The EAT agreed that the ET had carried out a fair, objective assessment as to whether Argos’s actions amounted to a breach of the implied term and had correctly concluded this amounted to a constructive dismissal. That said, as constructive dismissals are not always necessarily unfair dismissals, they had failed to properly consider if Argos had acted reasonably.

A significant aspect of this decision was the ET’s failure to assess the suitability of the new role. The EAT explained that, from what it could see, the ET had not approached this in the correct way and it was therefore unclear how they had assessed the role was unsuitable. To this end, the EAT concluded that this needed to be revisited to confirm whether the dismissal was fair and what redundancy pay should be due to the claimant. The case was remitted to the ET for further consideration on this point.

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