A Fair Redundancy Process Requires Consultation at a Formative Stage

A fair redundancy process requires consultation of affected employees at a formative stage when there is at least the potential for them to influence the outcome. The Employment Appeal Tribunal (EAT) succinctly made that point in finding that a recruitment consultant in the banking sector was…

Dec 11, 2023

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A fair redundancy process requires consultation of affected employees at a formative stage when there is at least the potential for them to influence the outcome. The Employment Appeal Tribunal (EAT) succinctly made that point in finding that a recruitment consultant in the banking sector was unfairly dismissed.

The man’s employer, part of an American-owned group, experienced a downturn in business due to the COVID-19 pandemic. A decision was taken that redundancies were required amongst members of his 16-person team. A scoring process was conducted in accordance with entirely subjective criteria set by the US parent company. He came lowest in the rankings.

Only after scoring was complete, however, was a timetable set for the redundancy process and a decision taken as to how many employees would lose their jobs. The man attended a succession of consultation meetings but was ultimately dismissed. In the event, one of his colleagues left voluntarily and he was the only member of his team who was made compulsorily redundant.

In subsequently rejecting his unfair dismissal claim, an employment judge found that he was not able to demonstrate that he should have been scored more highly. The scoring process was carried out in good faith and was not affected by any conscious bias. His internal appeal against his dismissal was conscientiously handled.

In upholding his appeal against that outcome, the EAT noted that fair consultation of employees at risk of redundancy, both at a workforce and individual level, is a vital element of good industrial relations. That is so whether a workplace is unionised or not. It further observed that redundancy selection procedures commonly used in other countries may not accord with the usual practice in the UK.

The EAT found that there was a clear absence of consultation at a formative stage of the redundancy process in question. There was never any opportunity for those at risk of losing their jobs to discuss the prospects of a different approach being taken to any aspect of the process, the methodology of which was chosen by the employer.

There was no meaningful workforce consultation at a stage when employees had the potential to impact on the decision. The process was not conducted under pressure of time and the absence of such consultation, for which there was no good reason, was sufficient to render the man’s dismissal unfair. Questions of remedy were remitted for consideration by the same employment judge.

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