The Court of Appeal has clarified when “general workforce consultation” is required in redundancy situations
Background
In De Bank Haycocks v ADP RPO UK Ltd, the claimant brought an unfair dismissal claim after being made redundant on the basis that his employer had not followed a fair redundancy process. He challenged his employer on their selection criteria and the lack of consultation over his scores, arguing that they were too low.
The employment tribunal dismissed his claim on the basis that the employer had completed a thorough investigation into his concerns and that he was unable to demonstrate that his scores were unfairly marked down. However, on the claimant appealing to the Employment Appeal Tribunal (EAT), the dismissal was found to be unfair because there had been a lack of meaningful collective consultation by the employer at a formative stage in the process and there had not been “general workforce consultation”.
It had previously been well-established that collective redundancy consultation with employee or union representatives was not required unless the employer envisaged making 20 or more employees redundant at one establishment within 90 days.
The EAT’s suggestion that “general workforce consultation” was required in this case (where there were only 16 employees being made redundant) caused concern that a form of collective consultation was now required in all redundancy situations (regardless of employee numbers).
The Court of Appeal’s decision
The Court of Appeal restored the employment tribunal’s decision that the dismissal had not been unfair based on three key points:
- There is no requirement for “general workforce consultation” in small-scale redundancies: The Court of Appeal said that it was unclear what was meant by the EAT’s uses of the term “general workforce consultation” but indicated that it could mean a system similar to those required for large scale redundancies. It concluded that, although it is good practice for employers to allow employees during individual consultations to express their views on issues relating to them and the group, a failure to do so may not necessarily render a dismissal unfair.
- Consultation at the formative stage: The Court of Appeal pointed out that the EAT had only found there to be no consultation at a formative stage due to mistaken expectation of “general workforce consultation”. It had not actually considered the sequences of events and the individual consultation that did take place with the claimant.
- Fair redundancy process: The Court of Appeal held that the scoring exercise would only have been unfair if the employer had not been prepared to reconsider its decision. Although it would have been best practice for the employer to have completed the scoring after starting the consultation process, the claimant was given a fair opportunity to challenge his scores on appeal and the process was deemed to be fair.
The Court of Appeal’s conclusion that there is no requirement for a workforce consultation over small-scale redundancies is a relief for employers as it reaffirms the current understanding of the requirements involved at the start of a redundancy process.
The decision also acts as a reminder to employers to ensure their redundancy process is fair from the outset. It is possible that the unfair dismissal claim would have succeeded in this case had the employer not carried out a constructive review of the scores after receiving the initial complaint. Making sure that employees are provided with details surrounding the selection process (including any scoring involved) and offered an opportunity to discuss this before any redundancies is key to reducing the risk of claims.
If you have any questions regarding a redundancy or redundancy process, please contact [email protected].
