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8 May 2012
Employment Appeal Tribunal
Lady Smith, Miss J Gaskell and Mrs A Hibberd
The need to save costs in a recession by changing employees' status to casual workers with no guaranteed hours of work can be a ‘substantial reason for dismissal' and can be fair if there are sound business reasons for it and the employees have been properly consulted.
Two employees were consulted over becoming engaged on an ad hoc, ‘when needed' basis. They were asked to sign new contracts reflecting the new arrangement. They resigned and complained that they had been constructively dismissed. The EAT held the dismissals were fair because there were sound business reasons and the employers had fully consulted over a long period.
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