Is this constructive dismissal?

[cakey]

My employer is making some changes to our team. These are supposedly cost savings but actually will cost the organisation more due to salaries.

 

There are 5 members of the team at level 4 with management responsibilities as well as managing a territory of work.

 

They are proposing to demote those 5 people to level 3 (but protect their salary for 4 years) and just leave them with looking after their territory then promote (through and application process) 2 of those 5 to level 5 roles with a higher salary!

 

The demotion, loss of management responsibilities, and despite the salary being protected means those members of staff demoted will no longer be a part of the incremental salary reward scheme... does this amount to possible constructive dismissal?

 

The organisation will be giving those members of staff revised contracts which they will then ask them to sign - what happens if they refuse to agree to those fundamental change in terms?

[cakey]

bump

[teaboy2]

Basically No

 

they are being made redundant of their current position in which they will be paid (or should be paid) their redundancy package as well any other entitlements as stated in their contract including but not limited to accured holiday's and therefore upon redundacy their employment is effectively terminated.

 

Once they start their new employment in the new roles then they are only entitled to the same contractual bonuses as those that are already in the same role. To have different/extra bonuses, in which you gained from, then those that are already in those roles prior to them would be unfair and to those that are in the same role of employment doing the exact same job. The compensatory pay for 4 years where their salary is gauranteed is simply just that, compensation for loss of income as a result of the reemployment, and is discretional as to how long the company chooses to gaurantee. If anything, if the company was to give them the extra bonuses then it be those that werent getting those bonuses that would have grounds in which to complain not those that have been given new employment in that role.

 

When you say they have been given revised contracts its important to note that when made redundant their original contract is terminated. If offered a new position in the company then the contract offered is a new contract and not that of a revised one. Basically its the same as leaving one place of employment and starting a new at a different place of employment.

 

The company has no choice but to follow redundancy procedures here, they can not simply demote them and offer a revised contract if they did or are doing that, then yes you would have grounds for constructive dismissal but only if that is actually the case. But going by what you have said in your post, it would seem the company is following the redundancy procedure.

 

hope that helps to clarify things and please, if it is that they are not following the redundancy procedures let us know and we can advise accordingly.

Edited January 9, 2010 by teaboy2
spelling

[cakey]

Thanks, just an update, when I approached my employer about what they were doing (they were not going to give redundancy) they backed down and kept everyone at the same grade.