The Court of Appeal has overturned the Employment Appeal Tribunal’s decision and restored the employment tribunal’s decision in ruling that an employer’s redundancy dismissal process was fair overall.
In this case the employee was a recruitment consultant. The employer had used a scoring matrix before the redundancy consultations had started to determine the pool of recruitment consultants with which to start the consultations. The employee was not told how he, or his colleagues, had been scored against the selection criteria. The employee was not given his own matrix scores until after his dismissal when he internally appealed the redundancy. The employee brought an unfair dismissal claim in the employment tribunal and argued that the dismissal was unfair because, among other failings, his employer had failed to give him the opportunity to challenge and express his views on the redundancy scores at the stage of his redundancy when proper consultation on these matters could still affect the outcome.
Overturning the Employment Appeal Tribunal’s ruling, the Court of Appeal found that there was no justification for departing from the well-established principle that the adequacy of consultation in redundancy situations has to be considered on a case-by-case basis. Caselaw (i.e. previous binding rulings of the employment tribunals and courts) has established that there is a requirement to carry out consultation at a formative stage i.e. at the stage where it can still have an influence on the outcomes. The later the consultation takes place, the greater the risk the decision-maker will have closed their mind and the consultation considered meaningless.
Whilst the Court of Appeal agreed that it was bad practice for the employer to carry out the scoring exercise before the consultation started, in this case the employee was still given an opportunity to raise complaints about the scoring process at the appeal stage and the appeal was handled fairly in this particular case. The Court of Appeal disagreed with the Employment Appeal Tribunal that there was a need for a ‘general workforce consultation’ i.e. a group meeting, as part of a requirement that consultation take place at the formative stage.
Unlike the case in a collective redundancy consultation process, in individual redundancies there is no requirement to consult with elected employee representatives or a recognised trade union. In the case of individual redundancies, while group meetings can be useful, no one at such a general workforce meeting has a mandate to represent the individual employees, who will simply express their own views (or not).
Key takeaways
While the procedural errors were corrected in the employer’s fair appeal process in this case, it is clearly better not to rely on the appeal process to correct any failings prior to dismissal in the consultation process, as this creates greater risk of an unfair dismissal ruling for the employer if this means the dismissal process is still unfair overall. Caselaw has long-established that the redundancy scoring ought to take place after the consultation process has commenced (rather than beforehand) and that employees be given an opportunity to comment on the selection criteria during the consultation process. Employees must also be given their own scores during the consultation process, understand how these rank when compared to other employees’ scores (although there is no requirement to be shown other employees’ scores) and be given an opportunity to comment on them before any dismissal.
Fact sheet guidance and template letters on redundancy can be found on the FSB Legal and Business Hub. FSB members should take legal advice by calling the FSB Legal Advice Line or booking a call via the FSB Legal and Business Hub prior to dismissing or making redundant any employee.