Redundancy consultation- pool of one
19 October 2022
The Employment Appeal Tribunal (EAT) has considered whether a redundancy process was fair when the selection criterion adopted meant that the pool for selection was reduced to only one employee.
The claimant was a nurse who had been employed through a series of fixed term contracts, alongside another nurse who was in a similar role and also employed under successive fixed term contracts. The employer needed to make some financial savings and invited the claimant to a meeting at which she was told of the financial situation. The employer later decided that since the claimant’s contract was the first of the two to expire, she should be the one selected for redundancy. The remaining period of redundancy consultation consisted of attempts to find the claimant alternative employment, but this was ultimately unsuccessful.
The claimant brought a claim for unfair dismissal in the employment tribunal, which was unsuccessful. She appealed to the EAT.
The EAT has allowed the appeal, substituting a finding that the dismissal was unfair. It noted that consultation is a fundamental aspect of a fair redundancy procedure. For consultation to be genuine and meaningful, it must take place at an early stage when the employee can still potentially have an influence over the process.
In this case, the decision to dismiss the claimant on the grounds that her contract was the first up for renewal meant that the pool for selection was reduced to one, but there had been no consultation over the use of this as a selection criterion. The EAT held that where the choice of selection criterion has the practical result that the selection for redundancy is already made, consultation should take place before the decision is reached to use that criterion. The employer’s failure to do so meant that the decision to dismiss the claimant had effectively been made without any prior consultation. The tribunal had failed to explain why it was reasonable for the employer to make that decision, so the EAT concluded that the dismissal was unfair.
The Birketts view
The claimant in this case had been employed on a series of fixed term contracts since 2016. It provides a useful reminder that an expiry of a fixed term contract is still legally a dismissal for the purposes of bringing an unfair dismissal claim (subject to the two year qualifying period), and an employee in this situation should still be taken through a proper redundancy consultation process if their contract is not being renewed.
This decision does not mean that a pool of one for a redundancy selection is not fair in appropriate circumstances. But, where there is more than one employee doing the same job and the choice of selection criterion means that the pool is reduced to one simply by application of the criterion (in this case, the date the contract was due to expire), it should not be adopted without prior consultation. Consultation with the employee only after the decision had been made to use this as the selection criterion was futile and the outcome had therefore been pre-determined. Generally, in most cases it is advisable to adopt multiple criteria to ensure a fair redundancy selection process.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at October 2022.