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2023 Employment Law Take-aways Blog. Redundancy under Reform?

December 13, 2023

With 2023 approaching its end, the employment team have decided to focus our remaining for the year reporting on our employment law highlights for this year.  Following on from Annabel’s article last week regarding the dangers of apprenticeships, next up is our first year Trainee Ciaran Milarvie.

I joined the team at the start of September for my first seat as a trainee. Throughout this time, I have helped the team deal with a plethora of situations for clients, from unfair dismissal to TUPE transfers. However, one area of the law which seems to have remained a constant on my time sheet for the past 3 months is redundancy.

I have noticed that most of the redundancy situations in which I have been involved did not involve a trade union. After spending time learning about the imbalance of power between employer and employee at university, I was surprised at this. How can workers be guaranteed their rights without the support of collective bargaining/representation of a trade union?

As it happens, an important decision crossed my desk at the end of November which echoed some of my concerns. It indicated that the Employment Appeal Tribunal had decided to act on this imbalance caused by the evolution of the modern employment market. With less trade union representation, the band of reasonableness within a redundancy procedure should potentially be expanded when considering individual/workforce consultation, to recognise the reality of good industrial relations in the 2023 working environment.  

In the case of Joseph De Bank Haycocks v ADP RPO UK Ltd, an employer provided recruitment services to various clients.  One of those clients was a bank whose requirements for recruitment services reduced by 50% due to the pandemic. DBH was part of a 16-employee team whose sole role was recruitment for that bank. It was decided that a reduction of the workforce was required. Each employee was scored on various subjective selection criteria points, with DBH coming last in the scoring. DBH was invited to a meeting where he was told that there was a requirement for redundancies, and that he could ask questions and suggest alternative approaches. DBH was then invited to a further meeting and, at a final meeting, he was handed a letter of dismissal. Over the course of these meetings DBH was unaware of what scores he had achieved and was not given the scores of the other 15 colleagues as a comparison. DBH appealed against the dismissal decision. By the time of his appeal meeting DBH had been given his scores (but not those of his colleagues).  His appeal was unsuccessful.

DHB raised an Employment Tribunal (“ET”) claim of unfair dismissal.  His claim was unsuccessful. The ET concluded that, despite not receiving his scores, the redundancy process was carried out thoroughly and that DHB had failed to demonstrate that he should have received a higher score. DBH appealed to the EAT. He argued that the ET had failed to focus on the need for consultation, particularly at a formative stage of the redundancy process.

The EAT assessed the requirements of reasonableness in redundancy consultations (s.98(4) ERA 1996). It noted that, based on the case law, reasonableness has reflected what is deemed to be good industrial practice. The EAT highlighted two significant changes in the nature of employment: a reduction in trade union membership; and an increase in employment featuring an international element in the corporate structure.

Statute and case law outline that where there are representatives, they must be consulted at a formative stage. However, it is less clear on unrepresented employees. The EAT considered that this was a failure to recognise modern, good industrial relations. Collective consultation reflects good industrial relations, and there should be an opportunity for the unrepresented workforce to suggest other means by which the employer could minimise the impact of a redundancy situation. Additionally, using an American selection matrix – which the respondent did as a UK subsidiary of a US company- would not accurately reflect UK practises.

The EAT concluded that the tribunal had failed to address the clear absence of consultation at the formative stage and allowed the appeal, overturning the decision that the dismissal was fair. The judgement states at paragraph 32, “The lack of consultation meant that there was never any opportunity to discuss the prospects of a different approach to any aspect of the redundancy process chosen by the employer. The absence of meaningful consultation at a stage when employees have the potential to affect the decision is indicative of an unfair process.”

It could be argued that the EAT have overstepped their mark. On the face of it, their decision goes beyond the statutory provisions on redundancy. We would not be surprised to see a further appeal in this case.   

My 2023 redundancy takeaways are these:

• Employment law rules will change with evolving industrial relations. It is always wise to discuss your plans with an employment lawyer who will have their ear to the ground.

• Until further news on this decision, consult with employees at an early stage on redundancy proposals. 

• If the individual has no collective bargaining power, make reasonable attempts to include them in discussions that affect them, this will go far in insuring that you have been reasonable in your decision.

The opinions expressed in this site are of the author(s) only and do not necessarily represent the opinions of Blackadders LLP.

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