Manager who refused new role with 20 per cent pay cut was unfairly dismissed, tribunal rules

29 Jan 2018 By Marianne Calnan

Employer ‘disposed of grievance’ by showing ‘unreasonable inflexibility’ in sacking employee during restructuring

A betting shop manager who refused to take up a new role with a 20 per cent pay cut during a business restructure – and whose right to appeal against her dismissal was ignored – was unfairly dismissed, an employment tribunal has found.

The London South Employment Tribunal heard that William Hill’s Battersea store manager, Miss Dinham, would have been doing the same work as her current position but for almost £5,000 less a year if she had signed a proposed new contract.

Her £25,549.84 annual salary would have fallen to £20,721 – a reduction of £4,828.84. She had 18 years’ service, and began working for the company on 20 May 1998 before being dismissed on 26 January 2017.

In a judgment handed down on 15 November but published last week, the tribunal allowed Dinham’s unfair dismissal claim, acknowledging that she would have been undertaking the same work for less pay if she had signed the contract. The judge said William Hill’s actions were “dismissive”, and displayed “unreasonable inflexibility… evidenced by its approach to her grievance”.

On 22 July 2016, Nicola Frampton – director for UK retail at William Hill – wrote to Dinham to inform her about a reorganisation within the company, which would include combining shop manager and deputy manager roles into a customer experience manager position.

Dinham was invited by Mike Beveridge, district operations manager, to a collective consultation meeting to discuss how her role change would affect her.

Eight managers, alongside Dinham, refused to accept the new terms of employment. William Hill then offered her a £4,828.84 supplement for the first year of her new role, but did not offer to continue this thereafter. 

The tribunal heard that the new contract would decrease Dinham’s salary and end her entitlement for time and a half for working on Sundays and double pay for working on bank holidays, as well as requiring her to work five days per week, between Monday and Sunday, as opposed to five days between Monday and Saturday. 

A consultation took place, with the intended date for commencement of the changes being 1 January 2017. Dinham raised her concerns and asked whether redundancy was an option. 

Dinham attended a meeting chaired by Beveridge on 17 October 2016 during which she continued to express reluctance to sign the contract, and argued that she should retain her salary because of her long service. Beveridge, however, said it would be unfair to retain her salary given that new employees would be paid less.

Beveridge wrote to Dinham to explain that her employment could be terminated if she did not sign a new contract. The pair met on 24 January 2017 alongside area manager Tara Collins.

At this meeting, Dinham was asked whether she had considered applying for the higher-paid role of business performance manager, to which she said she could not because of childcare commitments, as well as that she did not want the pressures of a new position.

She received a letter informing her that her contract of employment was terminated on notice, and that she would be offered re-engagement with the company.

Dinham raised a grievance through a letter the same day, stating that she had been informed that there was no right of appeal even though she believed she had the right to appeal the decision within five days, that she was bullied into signing a contract and that she could not financially manage the wage cut. 

After writing to William Hill’s HR department on 20 February 2017, Dinham received a response on 4 April, which said her opportunity to raise a formal complaint during the consultation process had expired and she was dismissed “for some other substantial reason”.

In the finding of unfair dismissal, employment Judge Hall-Smith judge acknowledged that William Hill had conducted a reasonable process in terms of informing and consulting with staff, but said informing Dinham that her complaint was out of time effectively “disposed of her grievance” and made the procedure unfair. 

The judge agreed with Dinham that her length of service should have been considered. “[William Hill] was prioritising its concept of fairness to new employees rather than considering the implications of longstanding employees,” he said. “Its emphasis on fairness appeared to disregard [her] understandable perception of unfairness by having a very significant pay cut to achieve parity with the salaries of new employees.”

A remedy hearing will be scheduled in due course. 

This case sends a warning to employers that they cannot play around with employees’ pay lightly, Beverley Sunderland, director of Crossland Employment Solicitors, told People Management.

Sunderland said William Hill’s lack of acknowledgement of Dinham’s long service was to its severe detriment. “The employer had more concern over new employees’ pay than Dinham’s and fell at the last hurdle of reducing her pay without considering her length of service.”

Leon Deakin, partner in the employment team at Coffin Mew, said William Hill’s argument that Dinham’s “time to complain had expired is not good practice”, whereas “dealing with her complaint quickly and thoroughly would have been the right thing”.

Deakin added that given the company’s size – it has 2,400 licensed betting offices and 10,000 shop staff – it had access to sufficient resources to be flexible around Dinham’s employment terms.

William Hill had not responded to People Management’s request for comment by press time.

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