The law of redundancy in the context of unfair dismissal is well settled. If a redundancy situation arises (as defined by s139 Employment Rights Act 1996), for a decision to dismiss for redundancy to be reasonable, there are certain standards an employer must comply with (as set out in Williams v Compair Maxam Ltd [1982] IRLR 83).
These include:
· Warning employees of potential redundancies.
· Consulting over the criteria to be applied for redundancy selection.
· Choosing selection criteria that are objective.
· Fairly applying the selection criteria.
· Exploring possible alternative employment for affected employees rather than making them redundant.
Industrial practice has moved on somewhat since the 1980s. The original judgment in Williams referred to consulting with the trade union as to the selection criteria for redundancy and to considering representations from the union as to any redundancy selection. Where there is a recognised workplace union, that will remain good industrial practice, but for employees in non-unionised workplaces, the consultation should be with them rather than a union. Of course, where the employer is proposing to dismiss 20 or more employees, they are required to conduct consultations with appropriate employee representatives (s188 Trade Union and Labour Relations (Consolidation) Act 1992).
In Joseph de Bank Haycocks v ADP RPO UK Limited [2023] EAT 129, the employer failed to consult with employees at a formative stage of the redundancy process, including what the selection criteria to be applied should be and the number of individuals proposed to be dismissed by reason of redundancy.
Recognising that industrial practices had changed significantly since the 1980s (in particular, the decline in union representation outside the public sector and the increase in cases involving an international element in the corporate structure), the EAT in Joseph sought to distill some key principles on reasonableness and redundancy dismissals from the cases as follows:
1. The employer will normally warn and consult either the employees affected or their representative.
2. A fair consultation occurs when proposals are at a formative stage and where adequate information and adequate time in which to respond is given along with conscientious consideration being given to the response.
3. Whether in a collective or individual consultation, the purpose is to avoid dismissal or ameliorate the impact.
4. A redundancy process must be viewed as a whole, and an appeal may correct an earlier failing making the process as a whole reasonable.
5. The ET’s consideration should be of the whole process, also considering the reason for dismissal, in deciding whether it is reasonable to dismiss.
6. It is a question of fact and degree as to whether consultation is adequate, and it is not automatically unfair that there is a lack of consultation in a particular respect.
7. Any particular aspect of consultation, such as the provision of scoring, is not essential to a fair process.
8. The use of a scoring system does not make a process fair automatically.
9. The relevance or otherwise of individual scores will relate to the specific complaints raised in the case.
The important point from Joseph is that, whilst the nature of work may have changed (and indeed the redundancy process may be initiated in another jurisdiction where the Respondent is a corporate entity), the basic requirements of fairness have not. Part of those requirements is that, as a rule, employees are consulted at an initial stage, that they are given adequate information and time to consider proposals, and their responses must be genuinely considered. This is the case whether or not there are union representatives, and regardless of the number of proposed redundancies. Following the initial consultation, an employer is then required to consult individually with individuals at risk of redundancy. A decision not to collectively consult will not necessarily render a dismissal unfair, but an employer would need to show why not consulting was reasonable in the circumstances.
Moreover, whilst the right to an appeal is an important part of the redundancy process, and it can cure failures in the individual selection process, it cannot cure a failure to collectively consult.
The important take away from Joseph is that, when seeking to act reasonably in the redundancy process, an employer should follow good industrial practice. The absence of a trade union does not negate the need to collectively consult at an initial stage of the process and an employer that fails to do so will likely need to justify that decision should an unfair dismissal claim be brought.
