The subject of our January coffee and catch-up webinar was redundancy, and we discussed our top tips, as well as updating delegates on recent developments. Thank you to all those who joined us, and for those who were unable to attend we have set out a summary of our top 5 redundancy tips below.
Please note that this discussion related to a standard redundancy process. If an employer is proposing to dismiss as redundant 20 or more employees at a single establishment within a period of 90 days or less, advice should be taken on collective consultation, and notification should be made to the secretary of state.
1. Is there a redundancy situation?
The starting point it to make sure that there is a genuine redundancy situation and that it fits the statutory definition – this is the first thing that a tribunal will look at when considering whether there is a fair dismissal.
A dismissal will be by reason of redundancy if it is wholly or mainly attributable to:
- a business closure (i.e. closure of the business altogether);
- a workplace closure (i.e. closure of one site); or
- a reduced requirement for employees to do work of a particular kind.
Please remember the following:
- A business does not need to be financially struggling to make redundancies. If an employer with plenty of work and financial stability decides fewer employees are required to perform the same functions, that too is a redundancy situation.
- Termination of a fixed term contract will be a redundancy if it is ending because of a reduced requirement for employees to carry out that type of work.
2. Selection
In order to be reasonable, selection criteria should, as far as possible, be both objective and capable of independent verification. This means that the criteria should be measurable, rather than just being based on personal opinion.
It may be possible to use subjective criteria as part of a selection matrix, for example ‘attitude’, but ideally there would be evidence to support the result, and scoring by more than one individual can help to minimise subjectivity.
Remember, if attendance records are used – absence for pregnancy-related illness, maternity or other family-friendly leave or disability should be discounted.
We had an interesting question during our webinar relating to menopause related absences. We confirmed that consideration should be given to discounting such absences for the purposes of redundancy scoring as otherwise this could give rise to a claim of sex and potentially disability discrimination, depending on the facts.
3. Proper and meaningful consultation
Meaningful consultation must be carried out at a formative stage (i.e. still at the stage where employees can influence the decision). This is fundamental to the fairness of any redundancy dismissal.
In the recent case of Joseph de Bank Haycocks v ADP RPO UK Limited (2023), the Claimant worked as a recruitment consultant for a recruitment business, ADP Ltd. When COVID hit, ADP Ltd decided to reduce its workforce. A consultation process was carried out, but the Claimant was not given the scores he had achieved or advised what selection criteria he had been scored against.
He appealed but was unsuccessful. As part of the appeal process, the Claimant’s scores were made available to him, but he was not shown any of his comparators’ scores.
He then went on to bring a claim for unfair dismissal. The Employment Tribunal held it was a fair dismissal. It found that although he was not given his scores until after his dismissal, the appeal process was carried out conscientiously (rectifying the flaws in the initial redundancy process), and he had not demonstrated that his score should have been higher.
However, the EAT allowed the Claimant’s appeal, holding that although the appeal could have rectified the failure to have provided the Claimant with his scores prior to the dismissal, there had still been a lack of meaningful consultation at the formative stages of the redundancy, and this could not be rectified.
4. Alternatives to redundancy
Employers should make reasonable efforts to consider alternatives to redundancy, including looking for suitable alternative employment.
In Lovingangels Care Ltd v Mhindurwa [2003], the EAT upheld a decision that a dismissal was unfair because the employer failed to give proper consideration to placing the employee on furlough as an alternative to redundancy. Although the furlough scheme is long gone, this case reminds employers of the need to give careful consideration to alternatives to redundancy before proceeding to dismiss. A failure to do so may mean the decision falls outside the range of reasonable responses, with the result that the dismissal is unfair.
Remember to think beyond alternative employment. An employer could also consider:
- Jobs shares
- Flexible shifts
- Recruitment freezes
- Overtime freezes
- Voluntary career breaks or redundancy
- Early retirement
5. Don’t forget priority employees
Draft regulations have now been published (Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024) setting out the changes to redundancy protections due to apply from 6 April 2024.
Under the current law, employees on maternity leave, shared parental leave or adoption leave already have special protection in a redundancy situation. They have the right to be offered a suitable alternative vacancy, if one is available, before being made redundant. This gives employees on these types of leave priority access to redeployment opportunities over other redundant employees.
Subject to Parliamentary approval, these existing redundancy protections will be extended as follows:
- Pregnant employees will be protected from the point of notifying their employer that they are pregnant.
- Where the employee is not entitled to statutory maternity leave, for example where she suffers a miscarriage before 24 weeks of pregnancy, the protection lasts from the notification to two weeks after the end of the pregnancy.
- Where an employee takes statutory maternity leave, the protected period ends 18 months after the date of child’s date of birth (if this has been notified to the employer before the end of leave) or 18 months from the first day of the expected week of childbirth.
Similar protection applies to those on adoption leave and shared parental leave.
Employers will need to review their redundancy processes to ensure managers identify all priority employees and look for all potentially suitable vacancies across the organisation and group companies (bearing in mind the ability for roles to be carried out remotely where appropriate). Failure to do so could risk claims for automatically unfair dismissal and possible discrimination.
Remember, this protection only gives employees priority for redeployment opportunities – it is not a ban on making employees redundant during the special protected period. Employees with priority status can still be selected for redundancy. The protection kicks in when it comes to the allocation of alternative roles.
We look forward to seeing some of you at our next coffee and catch up webinar on 16th April, and in the meantime please feel free to get in touch if you have any questions.
This is only intended to be a summary and not specific legal advice. If you would like further information or advice, please do contact a member of our team.
Contact Us
Selene Holden (seleneholden@greene-greene.com ~ 01284 717436)
Greg Jones (gregjones@greene-greene.com ~ 01284 717446)
Angharad Ellis Owen (aeo@greene-greene.com ~ 01284 717453)
Katie Harris-Wright (katieharris-wright@Greene-Greene.com ~ 01284 717442)
For more information on the services offered by Greene & Greene Solicitors please visit www.greene-greene.com and follow on Twitter @GreeneGreeneLaw.
