Scrase Law Employment Solicitors

When should consultation start in a redundancy process?

An employee with more than two years’ service has the right to bring a claim of unfair dismissal if they are dismissed.  When considering the claim, an Employment Tribunal will consider whether there was a fair reason for dismissal and whether the dismissal was fair and reasonable in all the circumstances. In the context of a redundancy dismissal, a fair process will usually include consultation, a fair basis for selection against objective criteria and a search for alternative employment.

The background

Mr D was one of a team of 16 people employed to recruit employees for a client of the employer.  In March 2020, demand for recruitment for the client reduced by around 50%.  At the end of May 2020, the employer decided to reduce the recruitment team.  The manager was asked to assess and mark her team using criteria given to her by the employer’s parent company, which she did at the beginning of June 2020.  The criteria were ‘entirely subjective’ and Mr D scored the lowest.  The employer then decided to reduce the team from 16 to 14.

Mr D was invited to a consultation meeting and notified of the requirement for redundancies.  The employer explained that the purpose of the meeting was to inform him of the situation.  He was invited to a further consultation meeting a week later, and then a final meeting took place a week after that at which Mr D was given a letter of dismissal.  Mr D did not know his score or the scores of the other employees.  He appealed against his dismissal, arguing that it was procedurally unfair, the criteria were subjective, and that he had not been given information about the scores to be able to challenge them.  Mr D was informed of his own score before the appeal hearing, but not the scores of his colleagues.

Consultation at a formative stage?

Mr D issued a claim of unfair dismissal in the Employment Tribunal.  The Tribunal dismissed the claim, and Mr D appealed to the Employment Appeal Tribunal (EAT).  He argued that there had been a failure to consult properly.

The EAT noted that it is for the Tribunal to conclude whether a dismissal for redundancy is reasonable.  The Tribunal should consider guidance from previous caselaw on the general applicable principles.  An important principle is that consultation in a redundancy situation should take place at a formative stage.  In this case, the EAT found that there was a clear absence of consultation at the formative stage.  This meant that there was never any opportunity to discuss the prospects of a different approach to any aspect of the redundancy process chosen by the employer.  The absence of meaningful consultation at a stage when employees have the potential to impact on the decision is indicative of an unfair process.  The EAT considered that there was no good reason on the facts for this consultation not to take place. 

The EAT went on to note that the absence of consultation is enough to make a dismissal unfair if the procedure is not fair overall.  To be fair overall, a process would require something at the appeal stage which would ‘fill any gaps in the earlier stages’ of the process.  In this case, although the appeal could correct any gaps in the individual consultation process, such as the failure to provide Mr D with his own scores, it could not correct the failure to meaningfully consult at the formative stage.  The EAT therefore found that the dismissal was unfair.

Comment

In this case, fewer than 20 redundancies were proposed within a 90-day period.  The EAT reviewed the guidance on general principles from previous caselaw.  These include that “a fair consultation occurs when proposals are at a formative stage and where adequate information and adequate time in which to respond is given along with conscientious consideration being given to the response”.  The EAT noted that a Tribunal may still conclude that a decision to dismiss was reasonable in the absence of consultation (for example, where it would be futile).  However, the Tribunal would be expected to explain why, in the particular circumstances, it had done so.

Where an employer is proposing 20 or more redundancies within a 90-day period, collective consultation obligations will also apply.  

Mr Joseph De Bank Haycocks v ADP RPO UK Ltd

15 December 2023

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