A 28 November 2023 EAT judgement serves as a reminder of the importance of following a full redundancy procedure for organisations located within the United Kingdom.
In the case of Joseph de Bank Haycocks v ADP RPO UK Limited, the claimant, Mr de Bank Haycocks, was employed by a UK subsidiary of a United States company. He was one of 16 people employed to recruit employees for a single client company.
As a result of the pandemic, there was a reduction in recruitment such that a decision was taken at the end of May 2020 to reduce the recruitment workforce from 16 to 14 roles. At the beginning of June 2020, the UK manager was provided with criteria for a selection matrix by the US parent company. The selection scoring was undertaken by the UK manager and the claimant came last in the rankings.
On 19 June 2020, the UK manager set out a timetable for the redundancy process which was due to commence with a 14-day period of consultation starting with meetings to be held on 30 June 2020. The claimant was called to a consultation meeting on 30 June 2020 and advised of the requirement for redundancies. A further meeting was held on 8 July 2020 and then a final meeting on 14 July 2020 at which the claimant was handed a letter of dismissal.
The claimant appealed against the dismissal, stating it had been procedurally unfair and citing that he had not been given information about the scoring of the selection matrix. An appeal meeting was held on 10 August 2020 by which time the claimant had been provided with a copy of his scores, however he was never shown the comparative scores of his colleagues.
Counsel for the respondent averred that:
- There had been three meetings where the claimant had the opportunity to respond;
- The appeal had corrected any error in not providing scores and that overall corrected any failings in the consultation;
- The respondent was not obliged to disclose scores during the process; and
- The timing of the scoring should not affect the fairness of the dismissal as it did not matter.
On the facts of this case, the EAT held that there had been a clear absence of meaningful consultation at the formative stage of the redundancy process. Employees should be afforded the opportunity to propose a different approach to any aspect of the process at a time when that proposal has potential to influence the employer’s decision.
Any particular gap in the earlier stages of redundancy selection could be repaired by a sufficiently revised appeal process, but the complete absence of consultation at an early stage cannot be compensated for down the line. The later was the case for Mr de Bank Haycocks, whose dismissal was found to be unfair.
Reasonable and Fair
Whether a dismissal for redundancy is fair is a question of substance that depends on whether the employer acted reasonably in treating redundancy as a sufficient reason for dismissing the employee. Employers are not considered to have acted reasonably unless they:
- Warn and consult employees about the proposed redundancy;
- Consider alternatives to redundancy;
- Adopt proper criteria and a fair basis on which to identify potentially redundant employees from an appropriate pool;
- Conduct a fair selection having applied the criteria fairly and objectively; and
- Consider and consult on alternative employment.
A tribunal may conclude that a decision to dismiss is reasonable in the absence of consultation but would be expected to explain why, in the particular circumstances, it had done so.
Key components of fair consultation include:
- Consultation when the proposals are at a formative stage.
- Adequate information and time on which to respond.
- Adequacy is a question of fact and degree.
- Conscientious consideration of the response to the consultation.
In order to maintain good industrial relations, where an employer is seeking to dismiss 19 or fewer employees as redundant, a reasonable employer should engage in consultation in order to minimise the impact of redundancies.
It should be noted that under UK legislation, where any employer is proposing to dismiss 20 or more employees there are statutory consultation obligations under Sections 188 and 188A of the Trade Union and Labour Relations (Consolidation) Act 1992, which include a requirement for the employer to inform and consult with trade union representatives or other elected employee representatives before any redundancies are made. A failure to carry out statutory consultation may render the employer liable for a payment of a protective award for the affected employees.
Organisations with global subsidiaries must be aware that the approach taken to good industrial relations will vary significantly between jurisdictions.
In this case, a tool for selection using entirely subjective criteria was provided by the US parent company as the first step in the redundancy process, which, in the EAT’s view, did not reflect a recognition of good industrial relations in the UK.
This case serves as a cautionary tale that UK subsidiaries should not be quick to use US selection criteria solely because the organisation provides a global policy. It always important to seek guidance on best practice and statutory requirements in any relevant jurisdiction before embarking on a redundancy process to ensure compliance, in this case with UK legislation and best practice.