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In order for an individual redundancy to be fair, is a “general workforce consultation” approach required?

Section 188(1) of TULRCA states that an employer is obliged to collectively consult if it is “proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less”. This type of consultation is sometimes alternatively described as “general workforce consultation”, as the term “collective” can have connotations of union representation. In any type of redundancy process, consultation should generally occur at the formative stage of the process, as this case highlights.

De Bank Haycocks (DBH) worked for ADP Ltd (ADP) as a recruitment consultant. DBH was part of a sixteen-person team employed solely to recruit employees for one particular investment bank. The bank’s requirement for recruitment services fell by around 50% as a result of the Coronavirus pandemic and ADP therefore decided to reduce its workforce.

ADP followed a selection process using a matrix of subjective criteria provided by the US parent company. When this was applied to those sixteen employees at risk, DBH scored the lowest.

There was no need for collective consultation in this case, as only two redundancies were to be made. However, it should be noted that the scoring took place before the number of employees to be made redundant was determined and that the employees were not involved in the process at the time the scoring was undertaken.

A timetable for the fourteen-day consultation period was set. During this period, one employee opted for voluntary redundancy. As the lowest scorer, DBH was invited to an initial consultation meeting where he was given the opportunity to ask questions and put forward any alternatives to the redundancy. He was not told either his score or those of his colleagues at this meeting.

At a second consultation meeting, which was the final meeting at the end of the fourteen-day consultation period, DBH’s dismissal by reason of redundancy was confirmed in writing. DBH appealed, but this appeal was unsuccessful. He was only presented with his score against the subjective criteria just prior to the appeal meeting.

The Employment Tribunal (ET) concluded that the dismissal was fair, despite DBH not knowing his scores until shortly before his appeal. DBH appealed to the Employment Appeal Tribunal (EAT) arguing that the ET failed to deal with the issue of consultation on the scores and the matrix/criteria used to reach them and that the absence of consultation at this stage prevented him from having any possibility of a different outcome other than his dismissal.

The EAT upheld the appeal on the basis that although the internal appeal (conducted after the decision to dismiss) could rectify the fact that DBH was not provided his scores until after his dismissal, it could not undo the fact that ADP had failed to consult at a formative stage of the consultation process, that being at a time that real change to the scoring criteria could have been considered. Due to the absence of sufficient consultation the dismissal was deemed unfair.

In reaching its decision, the EAT referred to the term “general workforce consultation” as a way of describing what an employer, acting within the reasonable band of responses, might follow by way of good industrial practice. What that would look like would depend on the type of workforce/particular circumstances of the redundancy situation, but what was imperative was that it included (and happened at a time where) there was real opportunity for the workforce to have an input that could impact the decision to make redundancies.

As a practical take away, this case highlights, irrespective of the number of individuals at risk of redundancy, the importance of consultation taking place at a formative stage, when the input from employees could still influence the outcome.

If you would like advice on redundancy exercises, whether individual or collective, please get in touch at [email protected].