If an employer wants to impose new contractual terms on their existing employees, they will sometimes serve notice of termination under the old contract, and then immediately offer new employment under the new employment contract. This is considered a dismissal under Hogg v Dover College 1988. If the employee refuses the new contract terms, the employer will then argue that it was unreasonable to fail to mitigate the loss if they reject the new contract, and that any Employment Tribunal award for unfair dismissal should be reduced accordingly.

This came up in Jackson v University Hospitals of North Midlands NHS Trust 2023. Ms Jackson was a band 6 nurse but in 2018 the Trust decided to reduce the number of band 6 posts and slotted her into a band 5 post (but with pay protection). However Ms Jackson refused to sign the new contract terms. She said she was in fact being made redundant and that she should get enhanced redundancy pay. Her grievance on the issue was partially successful but she resigned claiming Constructive Unfair Dismissal without serving her full notice. The Trust then withheld her enhanced redundancy pay because she had not served her full notice.

Ms Jackson argued that she was effectively dismissed when the band 5 role was imposed. The Employment Appeal Tribunal (EAT) said that a ‘Hogg dismissal’ will occur where the purported variation of a contract, done unilaterally, is such as to amount, in reality, to a termination of one contract and its replacement by another. Whether variation constitutes termination is a matter of fact and degree. In Ms Jackson’s case, the, the Tribunal should therefore consider simply whether her contract of employment had been terminated and replaced by another.

This case raises several issues:

It is always difficult for the employee to argue that they should be made redundant, when the employer wants them to take another role in the organisation. The employer may well refuse to pay redundancy pay in those circumstances.

If an employer serves notice under one contract and then immediately offers a new contract, that can put pressure on the employee to accept the new contract even if they don’t really want to do so. The situation needs to be handled carefully, but generally the employee should put their objections in writing as a first step.

Resigning to claim constructive unfair dismissal carries significant risks and should not be done without careful consideration of the pros and cons.

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