Accountant dismissed after refusing switch to self-employment: unfair dismissal win
An accountant with 7 years' service was unfairly dismissed after refusing to accept self-employment and reduced pay. The tribunal awarded £9,063.83.
1 min read · Last updated 18 May 2026
Case details
- #small-employer
- #no-disciplinary-procedure
- #acas-code-uplift
- #polkey-reduction
- #remote-work
- #other-employment
Key facts
- The claimant worked as an accountant for the respondent from 6 February 2015 until her dismissal on 25 March 2022.
- The respondent asked the claimant to switch to self-employment with reduced pay in February 2022, which she refused.
- On 10 March 2022, the respondent dismissed the claimant with notice, citing vague misconduct allegations.
- The respondent summarily dismissed the claimant on 25 March 2022, part-way through the notice period, for alleged gross misconduct.
- The tribunal found the real reason for dismissal was the claimant's refusal to accept self-employment, not misconduct.
- The respondent failed to carry out a reasonable investigation or follow any disciplinary procedure.
Timeline
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Employment commenced
The claimant started working for Finanspol Umbrella as a secretary, later becoming an accountant.
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Started working fully remotely
Due to the COVID-19 pandemic, the claimant began working entirely from home.
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Respondent proposed self-employment
Ms Kaminska emailed the claimant and two colleagues, proposing they switch to self-employment due to financial difficulties.
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Claimant counter-proposed
The claimant replied with a counter-proposal including notice pay and redundancy payment, which the respondent ignored.
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Dismissal with notice
Ms Kaminska met the claimant in her car at 9pm, handed her a termination letter with vague misconduct allegations, and told her the real reason was her refusal to accept self-employment.
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Summary dismissal
The respondent sent a letter summarily dismissing the claimant for gross misconduct, effective immediately, part-way through the notice period.
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Claimant started own business
The claimant began working as an accountant via her website taxpage.co.uk, earning a monthly wage.
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ET1 claim submitted
The claimant submitted her claim to the Employment Tribunal.
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Hearing day 1
The tribunal heard evidence and submissions via video hearing.
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Hearing day 2
The tribunal concluded evidence and closing submissions; judgment reserved.
The legal issue
The tribunal had to decide whether the claimant was unfairly dismissed, wrongfully dismissed, and whether the respondent made unlawful deductions from wages and failed to pay holiday pay.
The outcome
The tribunal upheld all claims. The claimant was unfairly dismissed because the real reason was her refusal to accept self-employment, not the alleged misconduct. The respondent also failed to follow any disciplinary process or conduct a reasonable investigation.
Compensation:
- Basic award: £2,792.90
- Compensatory award: £1,874.89 (reduced by 50% for Polkey chance of fair dismissal)
- Wrongful dismissal (notice pay): £2,539.00
- Unlawful deduction from wages: £1,450.80
- Holiday pay: £406.24
- Total: £9,063.83
Lessons & takeaways
- If an employer proposes a change to self-employment and the employee refuses, dismissing them for that refusal is likely to be unfair.
- A failure to carry out any investigation or follow a disciplinary procedure will almost always make a dismissal unfair.
- Even if an employer has financial difficulties, they must still follow a fair process before dismissing an employee.
- Employees who are dismissed should keep records of any alternative employment they find, as this can reduce compensation.
- The ACAS Code of Practice applies to all employers; failure to follow it can lead to an uplift in compensation of up to 25%.
A dismissal driven by refusal, not misconduct
This case shows what can happen when an employer tries to force a change in working arrangements and then uses misconduct allegations as a cover. The claimant, an accountant with seven years' service, was asked to switch to self-employment with reduced pay. When she refused, the respondent dismissed her, first with notice citing vague misconduct, then summarily for alleged gross misconduct.
The tribunal found that the real reason for dismissal was her refusal to accept self-employment, not any misconduct. The respondent had not carried out any investigation into the alleged misconduct and had not followed any disciplinary procedure. The tribunal described the process as wholly inadequate.
What the employer could have done differently
If the respondent had genuine financial difficulties, they could have explored a redundancy process or sought agreement to changes in terms and conditions. Instead, they attempted to impose a change and then dismissed the claimant when she refused. A fair process would have involved proper consultation, consideration of alternatives, and a genuine investigation into any alleged misconduct.
Why this result matters
This case is a reminder that employees have the right to refuse changes to their contract of employment without facing dismissal. It also highlights the importance of following a fair procedure, even for small employers. The tribunal applied a 50% Polkey reduction, reflecting the chance that the claimant might have been fairly dismissed if a proper process had been followed. However, the basic and compensatory awards still amounted to over £4,600, plus additional sums for wrongful dismissal, unlawful deductions, and holiday pay. The total award of £9,063.83 shows that even with reductions, failing to follow a fair process can be costly.
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