Employment contract: Fundamental breaches
A law firm that tried to change its head of family’s bonus scheme without notice and failed to promote her as agreed fundamentally breached her contract, a tribunal has ruled.
Sarah Lightfoot-Webber won her claim of constructive unfair dismissal against Hampshire and London firm Lawcomm Solicitors as a result.
She was employed from September 2017 as a family law executive, later being promoted to head of family law.
Under a bonus scheme, she was paid 33% of the net billing above her target in a quarter.
In April 2021, in countering another job offer, the firm told Ms Lightfoot-Webber that, once she qualified as a chartered legal executive, she would be promoted to director. She became a CILEX Fellow three months later but was not promoted.
In March 2022, the firm sought to change the terms of her bonus so that it was based on payments received in a quarter, rather than billings, after a month in which she had billed £20,000 but the firm had only received £6,362 of it.
Ms Lightfoot-Webber objected but was told that, under its terms, the scheme was discretionary and could be altered with immediate effect.
She resigned in June 2022, saying she was owed £7,000 from the first quarter of 2022, and that she considered herself to be constructively dismissed.
Judge Paula Volkmer held that the bonus scheme had contractual effect. That it was stated to be “non-contractual and may be revoked or altered at any time upon immediate notice” meant the firm had an element of discretion.
“However, a reasonable person would not understand this wording to mean that where an employee had begun work for a relevant quarter, the bonus could be altered or revoked part-way through that quarter…
“Any change for Q1 2022 had to be notified to the claimant by 31 December 2021.” This meant Lawcomm’s was in breach of contract and, by failing to pay the £7,000, was in fundamental breach.
The only qualification to the contractual obligation to make Ms Lightfoot-Webber a director was her ongoing performance. The quarterly performance review following her qualification “did not indicate any concerns”.
Lawcomm’s attempt before the tribunal “to cast the claimant’s people management skills in a bad light” were “not credible”.
Judge Volkmer said: “It is not the tribunal’s role to assist the [law firm] to escape a bad bargain. It cannot now add further caveats to the contractual obligation to make the claimant a director on qualification.” This too was a fundamental breach.
This all meant that Ms Lightfoot-Webber was constructively dismissed and the tribunal rejected Lawcomm’s efforts “to amplify largely historic matters, in relation to which no disciplinary steps were ever taken or intended to be taken, in order to seek to construct a misconduct argument”.
The dismissal was unfair, the judge concluded. There will be a separate hearing on remedy.
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