Redundancy consultation required at ‘formative stage’
15 December 2023
The Employment Appeal Tribunal (EAT) has recently held that an employee’s dismissal for redundancy was unfair due to a lack of meaningful consultation at the formative stages of the redundancy process.
Facts of the case
Mr De Bank Haycocks (Mr DBH) was employed by ADP RPO UK Ltd (ADP) to recruit new employees for a client company. In March 2020, due to the COVID-19 pandemic, demand for new employees at the client diminished by 50%. In May 2020, the decision was made by ADP to reduce the number of recruitment staff.
At the beginning of June 2020, Mr DBH’s manager assessed and scored her team members with reference to a set of subjective criteria. Mr DBH scored last in the rankings. On 18 June 2020, the decision was made to reduce the team by two and a timetable was set for the redundancy process.
Consultations began on 30 June 2020 with an initial consultation meeting, followed by a consultation period of 14 days and ending with those leaving being informed on 14 July 2020. Throughout the process, Mr DBH was unaware of how he or his colleagues had scored against the selection criteria. His own scores were not revealed to him until he (unsuccessfully) appealed to ADP against his dismissal.
An employment tribunal dismissed Mr DBH’s claim for unfair dismissal, rejecting his criticism of ADP’s pool and selection criteria used in the redundancy process. Mr DBH appealed the decision on the basis that the tribunal had not considered ADP’s failure to consult properly in the redundancy process.
The EAT allowed the appeal and substituted a finding of unfair dismissal.
The EAT held that consultations in Mr DBH’s case did not take place at a formative stage and that Mr DBH was not provided with adequate information about the redundancy. This meant that he could not have any meaningful impact on the redundancy decision. Although he was able to obtain his scores on appeal to ADP, this did not correct ADP’s failure to meaningfully consult at the formative stage.
The Birketts view
This decision builds upon the existing authorities on how employers are expected to conduct a fair redundancy process. It emphasises the key role that consultation plays in whether the dismissal by reason of redundancy will be viewed as reasonable by a tribunal, even if the collective consultation obligations (proposed dismissals of 20 or more employees) do not apply.
The EAT held that the tribunal should have followed the general principles established in previous decisions in assessing whether ADP’s consultation was reasonable. Employers must consult their employees about the redundancy at a formative stage and in a meaningful way, meaning that the employee or their representative should be given adequate information and time to respond to that information and genuine consideration given to the response.
Consultation at a formative stage should provide a genuine opportunity for the employee to propose other means by which the employer could minimise the impact of a redundancy situation. The impact of providing an employee with individual or comparative scores will vary in each case and a redundancy process will be viewed as a whole when establishing whether or not it was fair.
At our next Early Bird webinar on 29 February 2024, we will be looking at the topic of redundancy and some of the ‘trip hazards’ for employers to avoid when carrying out a redundancy process. For more information and to book your free place click here.
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 December 2023.