Slade & Others v TNT (UK) Ltd - Dismissal and re-engagement on different terms was not unfair  EAT
Dismissal and re-engagement on less favourable terms is not unfair dismissal provided the employer demonstrates that it acted in the reasonable and honest belief that such actions would achieve legitimate and reasonable aims (such as cutting costs), and the tribunal is satsified that its actions fall within the range of reasonable responses open to it in those particular circumstances.
Mrs Slade worked for TNT. From 1983 she and 469 other employees had been entitled to receive an "end of sort" (EOS) bonus. In 2009 TNT negotiated with the trade union to end the bonus as part of its efforts to cut costs. It was feeling acute financial pressure as a result of the recession. Negotiations failed, so Mrs Slade and her colleagues were all given formal notice of termination of their contracts, with an offer of immediate re-engagement on terms that did not include the EOS bonus. Re-engagement was accepted under protest that the dismissals had been unfair; 183 claims could not be settled, and these four claims were the test cases.