A recent Employment Appeal Tribunal judgment reminds employers of the need to make genuine attempts to find suitable alternative employment
Background
It is a well-established principle that, when redundancy arises, an employer has a duty to take reasonable steps to find suitable alternative employment for the employee who is at risk. This requirement was revisited in the recent case of Hendy Group Ltd v Kennedy.
Mr Kennedy had been employed by Hendy Group Ltd (“Hendy”), a car dealership, since 2013, most recently as a trainer. He had 30 years’ experience in sales in the motor trade industry before taking on the training role. In 2020 Hendy commenced a redundancy process which resulted in Mr Kennedy’s dismissal. Mr Kennedy accepted that there was a genuine redundancy situation and that he had been fairly selected but claimed that his dismissal was unfair because Hendy hadn’t adequately, properly, or fairly considered whether there were any suitable alternative roles within the company for him.
Mr Kennedy stated in his claim that he was not given any support or assistance with finding and applying for other roles internally. He nonetheless applied for a number of available roles that he considered himself suitable for, but a number of issues occurred, including:
- Mr Kennedy being told that he could apply for posts listed on Hendy’s intranet, but a week after receiving notice of his dismissal (which would run for 7 weeks), he was instructed to return his work laptop, meaning he could no longer access the intranet or his work emails.
- Mr Kennedy having to apply for roles posted on Hendy’s website in the same way as external applicants.
- No suggestions being made to Mr Kennedy of roles that he could apply for and no support being given from either HR or management with his applications.
- HR failing to inform the hiring managers that Mr Kennedy was at risk of redundancy.
- After one application failed, some further applications were negatively influenced by that previous failure.
- Mr Kennedy being told on the last day of his employment that his outstanding applications would not be progressed, mentioning concerns regarding his motivations for applying for sales roles.
The Employment Tribunal (“Tribunal”) ruled in favour of Mr Kennedy. Hendy appealed to the Employment Appeal Tribunal (“EAT”) on the basis that the Tribunal had applied the wrong test when deciding whether Hendy had adequately considered suitable alternative employment. Hendy argued that the Tribunal had substituted its own view rather than thinking about whether the dismissal was within the range of reasonable responses and that it had failed to make a Polkey reduction to the compensatory award on the basis that Mr Kennedy would likely still have been dismissed, even if a fair process was followed.
EAT Decision
The EAT dismissed the appeal and upheld the Tribunal’s decision.
When determining whether a dismissal is fair or unfair, a tribunal should consider whether the employer acted reasonably in the circumstances, taking into account the size and resources of the organisation. The EAT ruled that the Tribunal had applied this test correctly in deciding that Hendy had failed because it took no action at all to help Mr Kennedy find suitable alternative employment, citing a number of failings that no reasonable employer should have accepted. It did not consider that the Judge had substituted its own view. The Tribunal Judge’s decision not to apply a Polkey reduction to Mr Kennedy’s compensation was justified as there was no evidence to suggest that he would have been dismissed if the correct procedure was followed.
Comments
This case emphasises a need for employers to make a genuine and “reasonable” effort when it comes to identifying suitable alternative employment opportunities during a redundancy process. It will not usually be enough simply to refer employees to any vacancies on the organisation’s website. Instead, prudent employers should take proactive measures such as speaking with employees about where their interests lie and actively assisting them with identifying any suitable alternative roles internally, even if they would involve a demotion. Employers should not make any assumptions as to what an employee will be willing to accept and should make them aware of all roles, including those in different locations and at different pay grades, documenting what has been discussed. Unlike in this case, an employer should also ensure that they are communicating with their employee(s) using a method to which they have access and that managers recruiting for internal vacancies are made aware that a potential internal candidate is at risk of redundancy.
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