The law states that, when making someone redundant, employers must notify their employee that their current contract is being terminated. The Employment Appeal Tribunal (EAT) held in East London NHS Foundation Trust v O’Connor that notifying someone that their post is to be deleted does not amount to notification of termination of their contract.

Mr O’Connor’s union, Unite, instructed Thompsons to act on his behalf.

Basic facts 

After being told in February 2017 that his role as a psycho-social intervention (PSI) worker was at risk of redundancy, Mr O’Connor received confirmation that it was to be deleted two months later. He was offered a trial period in the role of care coordinator which started on 3 July 2017. At the end of the trial, Mr O’Connor said it was not suitable and asked his employer to find him something else. The Trust refused and instead offered to extend the trial period by four weeks.

Mr O’Connor went off sick and subsequently tabled a grievance which was rejected. The Trust again offered him the role of care coordinator which he again refused along with offers of other jobs. His employment was terminated on 22 December 2017 when he was given 12 weeks’ pay in lieu of notice. Mr O’Connor claimed that he was entitled to a redundancy payment.

The Trust argued that he had been unreasonable in rejecting the role of care coordinator as it constituted suitable alternative employment. As such he had lost his entitlement to a redundancy payment under 141(2) of the Employment Rights Act (ERA) 1996.

Tribunal decision

The tribunal held that the Trust had failed to dismiss Mr O’Connor prior to starting the trial period in the proposed new role of care coordinator on 3 July 2017. It followed that as he had not been dismissed, the trial period in the new role could not constitute a statutory trial period under the ERA which must start immediately on an actual dismissal.

As the so-called trial period did not satisfy the requirements of the legislation, it was not in fact a statutory trial period. He was not, therefore, dismissed until 22 December 2017 (as opposed to 3 July, as the Trust had alleged).

The Trust appealed on the basis that the tribunal should have treated the notice of deletion of Mr O’Connor’s post as notice of dismissal for the purposes of section 136(1)(a) of the ERA. This states that an employee is deemed to have been dismissed by their employer if the contract under which they are employed is terminated by the employer.

EAT decision

Rejecting the appeal, the EAT pointed out that although Mr O’Connor had been notified that the role of PSI worker was being deleted with effect from 3 July, he had not been told by the Trust that it was terminating his contract.

Under section 136(1)(a), the employer is required to notify the employee that their current contract is being terminated. That is not necessarily the same as being told that the role in which they are currently employed under that contract is coming to an end. There is, therefore, no rule of law which states that just because the job that an employee has been performing ceases to exist does not automatically mean that they have been dismissed. Instead, it depends on all the facts and circumstances of the case.

The EAT remitted the claim to the tribunal to decide whether Mr O’Connor had been dismissed by reason of redundancy and was therefore entitled to a statutory redundancy payment.