Redundancy: seeking alternative employment 

A recent Employment Appeal Tribunal (EAT) decision serves as a timely reminder of the proactive steps employers must take in seeking alternative employment for employees at risk of redundancy. 

Hendy Group Ltd v Kennedy [2024] EAT 106 

Facts of the case  

The claimant, K, was employed by a car dealership in a variety of roles, eventually working as a full-time trainer until his redundancy in 2020. He had 30 years of experience in the motor trade, predominantly in sales. 

During the redundancy consultation process, K was told that he could apply for roles on the company’s website. However, he was not provided with guidance or assistance from HR and no specific roles were suggested to him. His notice of termination made no reference to the possibility of help to find another role. K’s access to internal email and the company’s intranet was withdrawn early in his notice period, further limiting his ability to seek redeployment. 

K applied for several sales roles during his notice period but was given no support from HR or management in doing so. The hiring managers were not informed that K had been selected for redundancy, and some of his applications were negatively impacted by his single unsuccessful interview.  

On K’s final day of employment, he received an email stating that his applications for other roles would not be progressed. The email expressed concerns about his motivations in applying for sales roles and stated that he would not be considered for other sales-related roles. 

An employment tribunal upheld K’s claim for unfair dismissal, finding that his employer had failed in its obligation to take reasonable steps to seek alternative employment to avoid the redundancy dismissal. He was awarded almost £20,000 compensation. The company appealed to the EAT. 

EAT decision 

The EAT has dismissed the employer’s appeal, upholding the decision of the employment tribunal that K had been unfairly dismissed. It agreed with the tribunal’s conclusion that there was no evidence of the company taking steps that a reasonable employer would be expected to take in seeking alternative employment for a redundant employee. This could have included assisting in identifying other roles or encouraging conversations about other roles, even if that meant a demotion. 

The employer’s duty to seek alternative employment had to be considered within the context of the size and resources of the employer. In this case, the employer was a large organisation with relatively large resources, and it had several vacancies within a short period of time for which K was suitable to be considered. 

The Birketts view 

An employer’s duty to seek alternative employment is a key consideration in determining the fairness of a redundancy dismissal.  

The extent of this duty depends on the size and administrative resources of the employer, which in this case meant that the employer had a higher standard to meet in order to demonstrate that it had taken reasonable steps to find alternative employment. This could have been achieved by signposting the individual to any suitable vacancies (even if these were a demotion) and supporting him with his applications. Withdrawing access from his company email and intranet during his notice period was clearly not helpful to the employer’s case. 

It should also be borne in mind that the duty to seek alternative employment is ongoing throughout an individual’s notice period. So even if no suitable vacancies are available at the point when the employee is served with notice of redundancy, the employer should continue to take steps to explore alternatives.  

Employers should ensure that they fully document all efforts made to identify and offer suitable alternative roles, including communications with affected employees and internal vacancy tracking. This will be a critical factor in defending any subsequent claims of unfair dismissal.