In a recent decision of the Employment Appeals Tribunal this week, the Tribunal were asked to consider whether the claimant was constructively dismissed in light of a unilateral alteration of her contractual terms (working week cut from five days to three days per week).
The claimant commenced work at the respondent crèche in 2006. On the 9th June 2011 she was called into a meeting to discuss the respondent’s financial situation together with normal business matters. The claimant stated that
the Manager informed the staff that she intended to introduce a 10% pay cut. The claimant was
given a letter of consent to sign. The letter stated “We have decided that a salary reduction is absolutely necessary at this time. We regret to inform you your monthly basic salary will be reduced by 10% which will take effect and be
deducted from your next pay date….” . The claimant refused to sign the letter of consent and informed the Manager that she would not be doing so. The claimant contended that the following Monday her shifts were changed for the first time in five years.
On Friday the 17th June, the claimant was informed that she would not be required to work on Monday or Tuesday of the following week which resulted in a 40% reduction in pay for her. The claimant’s contract of employment provided “Your normal working week will be 5 days, Monday to Friday”. The claimant subsequently attended her GP and was certifed as unfit for work.
The Tribunal noted “The burden of proof, which is a very high one, lies with the claimant. She must show that
hercresignation was not voluntary. The legal test to be applied is “an and or test”. Firstly,cthe Tribunal must look at the contract of employment and establish whether or not there has been asignificant breach going to the root of the contract. If the Tribunal is not satisfied that there has been a significant breach of the contract it can examine the conduct of both the employee and employer together with all the circumstances surrounding the termination to establish whether or not the decision of the employee to termination the contract was a reasonable one”
In addition the Tribunal noted “The legal test the claimant must satisfy is an onerous one. Firstly, the claimant must show that there has been a significant breach going to the root of the contract, which said breach prevented the claimant from carrying out her contractual duties”.
It stated “It is very clear from the evidence that the claimant was singled out following her refusal to sign the letter of consent” Following her refusal to sign the consent, the Tribunal stated that “the respondent attempted to unilaterally alter the terms of her contract by reducing her working days from five to three and thus reducing her remuneration by 40%. That is a breach of her contract. It is a breach that goes to the root of her contract. It is a breach which prevented her from carrying out her contractual duties”T
The Tribunal found that the claimant was constructively dismissed and although the award was relatively low at €10,000, the decision demonstrates how the unilateral alteration of a contract of employment can lead to a breach going to the root of the contract and preventing the employee from carrying out their duties.