This catch-all category requires an employer to show that the substantial reason for dismissal was potentially fair and reasonable in the circumstances.

 

There isn’t an exhaustive list of what might constitute grounds for SOSR. Each case turns on its own facts. But dismissal for SOSR is often used at the end of a fixed term contract, for example, maternity leave cover.

 

Case law in recent years has indicated that it can include objections to an employee’s continued employment by a third party, Henderson v Connect (South Tyneside) Ltd [2009]; dismissal because of a severely challenging personality, Perkin v St. George’s Healthcare NHS Trust [2006]; and where employee behaviour causes a breakdown in the employment relationship, Ezsias v North Glamorgan NHS Trust [2011].

The need for business reorganisation is a common scenario. For a long time, tribunals have accepted that businesses need a degree of flexibility in order to remain commercially viable. So it is potentially fair to dismiss for SOSR where there are real and justifiable grounds for a business reorganisation to which an employee objects.

 

But irrespective of the business challenges they face, employers must act in a reasonable way or risk facing an unfair dismissal claim. Let’s take a look at a recent tribunal decision:

Mr Smith was a manager for The Garden Centre Group Ltd. The nursery at which he worked was making substantial losses. The company proposed a number of changes to address the problem. The meeting to present the proposals was scheduled to begin at 5pm but started early and, when Mr Smith arrived at 4.55pm, it was almost over. His manager, Mrs Haywood, briefed Mr Smith about the proposals afterwards.

After the meeting, the company issued new terms of employment. A number of the proposed changes went considerably beyond those originally discussed. Mr Smith objected to the changes, but was told that they were non-negotiable.

 

Eventually, Mrs Haywood wrote to Mr Smith saying that, as he would not agree to the new contract, the company had to consider serving notice to terminate his existing contract and offering to re-employ him on the new terms. He was invited to a meeting, the purpose of which was to ensure that he fully understood the revised contract and the potential consequences if he did not agree to it.

At the meeting, Mr Smith was given notice of dismissal “by reason of refusal to accept a reasonable change in [his] terms and conditions of employment”. He complained that he had been unfairly dismissed, arguing that the company did not have the right to impose any new terms that it wished.

 

The tribunal accepted that Mr Smith had been dismissed for “some other substantial reason”, and that the company genuinely believed that it needed to make changes to employees’ terms and conditions in order to address its losses. The tribunal also considered whether or not the company had demonstrated a business need for the changes and whether or not there had been proper discussion and negotiation between the parties concerned.

It found that the organisation had an “unreasonable and intransigent” attitude to the proposed contractual changes. It had not demonstrated a real business need for any of the proposed changes, except as regards the flexibility of Mr Smith’s working hours. Ironically, his existing contract allowed the company to require him to work additional hours where needed. The rest of the proposed changes had “little or no business need behind them”.

The tribunal found that Mr Smith’s dismissal was unfair. He was awarded £8,990 for his basic award and loss of statutory rights.

Smith v The Garden Centre Group Ltd ET [2011]

What must employers do to protect themselves?

– Remember that the ACAS Code of Practice does apply to SOSR dismissals. The procedure that you follow should be at least as rigorous as that set out in the ACAS Code. It must be fair and proportionate in the circumstances

– Ensure that you have – and can clearly demonstrate – a substantial business requirement for each proposed change

 

– Explain the proposals and rationale. It is not enough just to rely on the overall picture (for instance, financial difficulties).