Employee given ultimatum of ‘resign or be dismissed’ wins over £12,000 (Sparks v DB Cleaners and Launderers Ltd – ET/1601082/2019)
In the case of Sparks v DB Cleaners and Launderers Ltd (ET/1601082/2019) the Employment Tribunal held that an employee who was given the ultimatum of ‘resign or be dismissed’ had been unfairly dismissed by her employer.
The facts in Sparks v DB Cleaners and Launderers Ltd
Mrs Sparks (the “Claimant”) commenced employment as an administrator from 1 October 2015 with DBS Cleaners and Launderers Ltd (the “Respondent”). The Respondent company was taken over by another company (the “Priory”) that year.
The Respondent company unilaterally reduced the Claimant’s annual salary by £3,000. She was given compensation of free use of the cleaning facilities by a manager, which she had taken advantage of from 2015 to 2018. The Respondent later argued the manager had no authority to offer 100% discounted cleaning as this was only a perk given to directors in the company. It was suggested by the Respondent she had dishonestly obtained this free discount. The Employment Tribunal (ET) dismissed this argument as her use of this service had been fully recorded and no objections raised during the relevant period (2015-2018).
The Respondent began disciplinary investigations into the Claimant’s use of the discount but these were abandoned. After the investigations certain responsibilities were taken away from the Claimant and given to other members of staff.
The Claimant was called to a meeting on 14 February 2019 and asked to sign a document headed `without prejudice negotiations’ before providing her with any information. The Claimant was assured there was no risk to her job in signing the document. She was asked how much she would be prepared to accept in order to leave her job. The Claimant insisted on a Google search to clarify what she would be entitled to in terms of payment for statutory redundancy which resulted in a calculation of £3,800. The Respondent’s representative offered less that half this amount (£1,500) plus her wages (later increased to £2,000) but she was not prepared to accept this amount and wished to remain in her job. She was then told if she did not accept the offer she would leave with nothing.
The Claimant left after accepting the slightly increased offer of £2,000. However, six weeks later she wrote to the Respondent to raise a grievance against what she described as her `dismissal’. This was rejected by the Respondent. The Claimant lodged a claim at the ET for unfair dismissal.
The decision of the Employment Tribunal
The ET found that the Claimant had been unfairly dismissed. She had been given an ultimatum to either resign or be dismissed. This was not a fair choice aimed at avoiding paying the Claimant a statutory redundancy payment. The decision to dismiss was procedurally unfair as no prior consultation had been entered into with the Claimant who had been misled as to nature of the discussions with the Respondent. The Claimant was awarded £12,897.95 in total, comprised of
- Basic Award: £3,894.21
- Compensatory Award: £14,010.75
- Pension Loss: £246.96
- Loss of statutory rights: £400.00
- 10% reduction: £1,465.77
Less sums received (£4,188.20)
Our solicitors’ comments on Sparks v DB Cleaners and Launderers Ltd
Chris Hadrill, a specialist employment solicitor at Redmans, commented on the case: “Employers should be aware that, if an employee is given an ultimatum of ‘resign or be dismissed’, there is a good chance that they will be dismissing the employee unfairly. Equally, employers should be careful – if they wish to enter into settlement negotiations – to ensure that they follow the correct process.”
The decision of the Employment Tribunal in Sparks v DB Cleaners and Launderers Ltd (ET/1601082/2019) can be found here.