Unfair Constructive Dismissal
Nick has worked for a medium-sized company as a sales manager for seven years. He is responsible for five people.
It would be unfair to say that Nick is lazy but his main interest in life is golf and this takes priority over his job. Nick’s team do not rate him highly because they do not think he pulls his weight.
The company is not doing very well and a new managing director, Mike, is appointed. The first thing Mike does is to review his management team. Mike’s assessment of Nick is that he has sales skills that the company needs but that he can’t manage people. He wants Nick to change jobs and go back on the road selling to the company’s customers.
Mike believes in the direct approach, so he calls Nick in out of the blue and tells him outright to “go back to being a sales rep or you have no future with the company”. Nick is shocked but does manage to ask if his pay will be cut. Mike says that he won’t cut his basic pay but that it will be frozen until the average sales reps’ pay catches up with Nick’s current level. Even worse news for Nick is that his company car will change to a cheaper model when the lease on his current BMW 3 Series runs out next month!
What can Nick do? He should allow himself 24 hours to be very fed up and get over the shock. Then he needs to start thinking clearly and objectively about his future.
There is a legal option, and there is a practical, common-sense, option (the two are not always the same!).
The legal position is pretty clear. Nick could raise a grievance about the way he has been treated. When this is rejected (which it will be, Mike has the backing of the Board to sort the Company out) he can resign claiming unfair constructive dismissal and he will win. Why will he win when Mike has simply taken a justified business decision? It’s the way Mike went about it that will cause the problem. Changing someone’s job and/or benefits with no warning is a breach of their employment contract.
But, in reality, what does this mean? Nick will have no income from the day he walks out; he will possibly have the stress of appearing in a tribunal; he will either be offered a settlement or be awarded compensation but the maximum compensatory award he could get is £58,400. It sounds like a lot but it isn’t really when compared with his salary package plus pension plus car. Nick may also find it more difficult to get another job if he is unemployed and his old employer is reluctant to give him a reference.
The other common sense option requires Nick to swallow his pride - not something many of us find easy. This option involves Nick negotiating with Mike the best terms he can, for example: “I think it is unfair to downgrade my car”. Having done that, Nick takes the new role but puts his effort into securing a new job whilst he is in employment.
There will of course be occasions when walking out is the right thing to do, but as most of us have mortgages and other bills to pay, maintaining one’s income is generally an important priority. Letting pride get in the way of that is normally a mistake.
Published 27/09/2006.
