Thu 27 Oct 2022

Redundancy consultation - falling at the first hurdle

Dismissal unfair where redundancy selection criteria, on which there was no consultation, inevitably led to a pool of one.

It is well established when dealing with collective consultation that in order to be fair and reasonable consultation ought to take place at the formative stages of a redundancy process.  This principle has stood the test of time as good industrial practice having been derived from a 40 year old case.  It is a principle that has recently been considered and applied in an individual redundancy situation - indeed one where the pool for selection was (erroneously) one.

Mogane v Bradford Teaching Hospitals NHS Foundation Trust concerned the redundancy of a nurse employed on a fixed term contract.  Another nurse, also employed on a fixed term contract, carried out a similar role.  The employer faced financial difficulties and a decision to reduce staff was made.  It was decided the most appropriate way to do that was to select the person (the claimant in this case) whose fixed term appointment was due for renewal soonest. Meetings where then convened to consult with the claimant on the situation and to explore alternatives to redundancy.

The claimant was unsuccessful before the employment tribunal, but the employment appeal tribunal ("EAT") overturned that judgment finding that the claimant had been unfairly dismissed.  The EAT found that there was genuine consultation in redundancy avoidance, but there was no consultation on the process itself.  The employer had fallen at the first hurdle because, at the point the employee was brought into the process, the employer had already decided upon the selection criteria.  Application of that criteria only had one possible outcome, that the claimant would be selected from redundancy.  The EAT judgment confirmed that, for a process to be fair, consultation "should occur at a stage when what an employee advances at that consultation can be considered and has the potential to affect the outcome".

While employers usually have a fairly wide latitude when it comes to identifying the selection criteria they intend to rely on, using single factors such as "last in first out" or, as was the case here, whose fixed term contract will expire soonest, will be scrutinised closely should they come before an employment tribunal, because of the increased risk of the process being "fixed" or a sham.  Although not a consideration in this case, it should also be borne in mind that selection of fixed-term employees for redundancy on the basis of their fixed-term status, unless objectively justifiable, could amount to less favourable treatment under the Fixed-term Employees Regulations.

For a step-by-step guide on handling redundancies listen to our redundancy podcast series.

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