Clydes dissenters lose dismissal case

Three solicitors and the head of education and train-ing at Clyde & Co have had their unfair dismissal claims against the firm dismissed.

The four were dismissed after refusing to change their pension policies from an Equitable Life-managed final salary scheme (FSS) (which the firm had used since 1977) to a money purchase group pension scheme (GPP).

Clydes is one of the last English firms to have moved to a GPP after the bear market led to large deficits in many firms’ FSSs.

Following their dismissals, two of the four claimants – Judith Philip, the firm’s head of education and training, and Maire Aodha, an assistant solicitor – were later re-empl-oyed at Clydes with the GPP written into their contracts.

They brought their claims “out of principle”, a Clydes spokesman said.

The other two claimants subsequently left the firm: Captain John David joined marine claims consultancy Global Claims Management and former Clydes partner Angela Horne went to Hill Dickinson as a partner.

The four alleged that Clydes should have considered alternative funding arrangements to the FSS and that it had made no detailed costings before closing the scheme and making the dismissals in September 2003.

The Employment Tribunal in London held that the “reason for the dismissals was a substantial reason” and was “within the range of reasonable responses which a hypothetical reasonable employer could have adopted”.

Clydes changed to a Standard Life-managed GPP scheme after discovering a deficit of £7.5m in its FSS fund. This had to be made up from the firm’s chest of annual profits of roughly £20m.

Previously, Clydes’ FSS had such a large surplus that the firm decided to reduce its contributions by between 8.5 and 10 per cent.

To bridge the shortfall in its FSS fund, Clydes decided in January 2003 to increase its partner contribution rate to the FSS to between 25.8 per cent and 41.7 per cent.

Its decision to change to a GPP – which it carried out after receiving approval from 95 per cent of the firm’s lawyers and staff – also emerged out of this shortfall.

The claimants’ lawyer, Berwin Leighton Paisner employment partner Rob Eldridge, declined to comment.

The Clydes spokesman said: “114 accepted the proposal and throughout remained employees of the firm. At no stage were their employment contracts terminated or any threat of termination made to them.”