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EMPLOYMENT LAW UPDATE: CUTTING HOURS CAN BE JUSTIFIED

EMPLOYERS who reduce employees’ hours for sound financial reasons have a defence to claims of both constructive dismissal and redundancy.

This was the outcome of a case at the Employment Appeal Tribunal in Scotland, where a woman whose hours had been cut from 36 hours to 28 hours had resigned.

The woman brought the claim against the Taxi Owners Association (Grangemouth) Ltd, where she had worked as a radio operator for four years and was a “valued employee”.

Her claim to the Tribunal was that her contract of employment had been fundamentally breached by the reduction in hours, which entitled her to claim she had been constructively dismissed. She had initially been told her hours would go down to 14 hours, but was then told it would be 28, although this was to be reviewed after six weeks. She had told her employers she was interested in voluntary redundancy, but this had not been offered to her.

An Employment Tribunal, held in Glasgow, found that her contract had been breached but that this was not unfair because this was justified by the introduction of competition from another taxi cab operator had led to a downturn in business.

She had claimed she was entitled to compensation for unfair dismissal and a redundancy payment and, but after hearing evidence of how the increased competition had led to a 50 per cent reduction in calls, she was awarded neither.

She took her appeal to Lady Smith at the Employment Appeal Tribunal, but the original decision has now been upheld as the correct one. Because the employer was able to prove they had a need for her to work for them, even for less hours, her role still existed and was not redundant.

Stephen Smith, employment lawyer for the Glasgow Law Practice, said: “When small employers have a downturn in business, even though there is less work, they feel constrained by what they believe employment law says about cutting hours.

“Because of some of the high-profile cases which they read about, they are afraid of having difficult discussions with their employees about what the situation is, because they are worried that some employees might simply resign and bring a claim, which will end up costing them more.

“This case is a good example of where, if the matter is handled properly, any claim can be defended successfully at the Tribunal, and with the right representations, it doesn’t have to get that far.”

*The Glasgow Law Practice offers a free initial consultation for new business clients. Please contact Mr Smith on 0141 552 9193.