Redundancy and unfair dismissal: key cases
Elements of consultation Failure to consult with an individual may make dismissal unfair but compensation may be reduced (Polkey reduction) where it made no difference to decision to dismiss. Consultation involves consideration of options to avoid redundancy. These may include early retirement, seeking volunteers, alternative employment, layoff and short-time working. Consultation involves not just communicating a previous decision. Must be at a formative stage where there is adequate information for response, adequate time to respond and conscientious consideration of the response by the employer. Definition of consultation: jointly examining and discussing problems of concern to management and workers to seek mutually acceptable solutions through a genuine exchange of views and information. Fair consultation involves giving the body consulted a fair and proper opportunity to understand fully the matters about which it is being consulted, and to express its views on those subjects, with the consulter thereafter considering those views properly and genuinely. The employee must be given sufficient information to challenge, correct and supplement the information which the employer may wrongly have considered when assessing selection for redundancy. Mugford v Midland Bank: if the employer has not consulted with either the trade union or the employee, the dismissal will normally be unfair unless the tribunal decides that consultation would have been a futile exercise. Alexander v Bridgen Enterprises Ltd: employers have to tell employees the reason for the redundancy, the selection criteria they are using and must give them their assessment. This includes an individual’s score in a selection process. R v British Coal Corporation and Secretary of State for Trade ex p. Vardy  IRLR 104, High Court: consultation requirements in respect of pit closures held matters of public law. A judicial review appropriate. British United Shoe Machinery Co Ltd v Clarke  IRLR 297, EAT: the question for the tribunal was whether failure of the employer to follow Code of Practice as to warnings and consultation would have made any difference. Where a lack of consultation would have made no difference to the overall result, then the finding of unfair dismissal cannot be justified. GEC Ferranti Defence Systems Ltd v MSF  IRLR 101, EAT: there was no fixed standard for amount of detail required to be supplied for statutory consultation procedure. A question of fact and circumstance. Robinson v Carrickfergus Borough Council  IRLR 122, CA: technical officer dismissed for redundancy. There was no agreed or customary redundancy procedure. The employer did not consider the possibility of alternative employment. There was no consultation with union. Held, as unfair dismissal. Kelly v Upholstery & Cabinet Works (Amesbury) Ltd  IRLR 91, EAT: a case of unfair dismissal where no consultation on redundancy unless exceptional circumstances. Duffy v Yeomans & Partners Ltd  IRLR 368, EAT: a test in relation to the consultation objective. Whether a reasonable employer could have dismissed employees for redundancy without consultation in light of facts known to the employer at the time. Case examples: Argos Ltd v Kuldo  2 WLUK 670, EAT K was employed by A as a group central costs manager. In September 2016 A made a number of redundancies. K was not made redundant, but her responsibilities were changed. In 2017 A identified 55 positions as being at risk of redundancy. K was told that she would be placed in a pool with another worker and that they would both be considered for the new post of central costs manager. K was given information about the consultation process. She was then told that the other worker had resigned and that she would be given the new role without risk of redundancy. A stated that it had applied a 70:30 rule, whereby an old post could be transferred to a new post if there was a difference of not more than 30 per cent between the two roles. K objected to the new post on the basis that it had lower status, fewer responsibilities and a change of job content. A treated this as a grievance and responded that K would be transferred to the new post. K asked A to confirm in writing that her employment was terminating on the ground of redundancy. A responded that K would be carrying out the same work as before, but under the job title of the new role. K appealed unsuccessfully against this decision. In November 2017 K resigned. She complained of unfair dismissal and wrongful dismissal and claimed a redundancy payment. The ET found that there had been no individual consultation with K and this was a breach of the implied term of mutual trust and confidence. A had failed to carry out a proper analysis of the similarities between the old post and the new post. This was also a breach of the implied term of mutual trust and confidence. Further, A’s failure to conduct a proper assessment in relation to K’s grievance appeal also amounted to a breach of the implied term. These breaches were repudiatory and K had been constructively dismissed. A Ltd appealed to the EAT. Decision: 1. The appeal against the finding of constructive dismissal was dismissed. 2. In relation to the unfairness of the dismissal, the appeal was upheld. There had been no clear finding in the ET of the reason for the dismissal. 3. In relation to the claim for redundancy pay, the suitability of alternative employment could be relevant to the fairness of the dismissal and to the question whether K was not entitled to a redundancy payment because she had unreasonably refused suitable alternative employment. The ET had not analysed this legal framework. 4. The case was remitted to the ET to consider whether the constructive dismissal, for which the reason was redundancy, was fair in all the circumstances, and to determine the outstanding claims for wrongful dismissal and a redundancy payment. Thomas v BNP Paribas Real Estate Advisory and Property Management UK Ltd (2017) Morning Star, January 6, EAT T was one of five people identified as being at risk of redundancy. He was placed in a pool of one. In January 2014 he was told that he was at risk of redundancy. He attended two consultation meetings at which he was told that there were no alternative posts available. A letter to T was addressed with the wrong name. He was made redundant. He appealed against the decision, arguing that the consultation process had been a sham with a predetermined outcome and that he had been selected because he was aged 60. The appeal was rejected and he complained of age discrimination and unfair dismissal. The ET rejected the complaints. It found that the consultation had been reasonable and there was no evidence to show that the company had a practice which involved dismissing people who were approaching age 60. T appealed to the EAT. The appeal was allowed in part. The tribunal had itself described the consultation as perfunctory and insensitive. Any dismissal was likely to have been unfair. The tribunal’s decision that the consultation was reasonable could not stand. In relation to the claim of age discrimination, the tribunal had applied the law correctly. It had considered and rejected the evidence put forward by T. The reason for the dismissal had been redundancy and not age.