Mr A Reason v McCarthy Tétrault LLP — 2024

The claimant, Mr A Reason, was employed by McCarthy Tétrault LLP as an Income Partner in London from 6 November 2018 on a full-time basis with a starting salary of £305,000, later increased to £320,000. The only claim before the Tribunal was unfair dismissal. The Tribunal recorded that dismissal itself was not in dispute; the issue was whether the respondent had proved redundancy as the reason or principal reason for dismissal and whether the dismissal was fair under section 98(4) ERA 1996. Remedy was expressly deferred to a separate hearing.

The respondent said a redundancy situation existed because the claimant had underbilled against a target of 1,400 billable hours and there was insufficient litigation work for him. The Tribunal accepted that the respondent raised underbilling concerns, but found the 2022 Lawyer Feedback Form did not contain any warning that the claimant's role was unsustainable or that a redundancy situation was anticipated. The Tribunal read the contemporaneous material as positive about future litigation and arbitration work, and found it did not show that the requirements of the business for employees to carry out litigation work had ceased or diminished within section 139(1)(b) ERA 1996.

The Tribunal also found that the respondent's focus between December 2022 and March 2023 was on negotiating a variation to the claimant's terms, including a proposed reduction in salary to £110,000 and lower targets, rather than on redundancy. It held that offering the claimant a smaller role or continued full-time work on different terms did not itself create a redundancy situation. When the respondent later withdrew the alternative employment arrangement, the Tribunal rejected the two reasons advanced for that decision and found that the withdrawal was not materially or causally linked to the claimant's ability to build client or colleague relationships.

On the reason for dismissal, the Tribunal concluded that the respondent had failed to prove redundancy because it had not shown a genuine reduced requirement for employees to carry out litigation work. It found no sufficient causal link between the claimant's underbilling or lack of salary increase and any diminution in the respondent's need for litigation work. The claim of unfair dismissal therefore succeeded, and the Tribunal stated that there would be a separate hearing on remedy.