It is well established that an employer seeking to make a redundancy must follow a fair process if they wish to avoid claims for unfair dismissal. One of the key components of a fair redundancy process is the need for consultation with employees who are at risk of redundancy and how best to select employees who should be at risk of redundancy.
In circumstances where fewer than 20 employees are being made redundant (meaning rules on collective consultation do not apply), there is no precise framework within which the consultation process must follow. Accordingly, employers would be well advised to pay particular attention to any guidance provided by the Tribunal as to these procedures and best practices.
The specifics of when fair consultation could occur in specific circumstances where a pool of one is applied was considered further in the recent EAT case of Mogane v Bradford Teaching Hospitals NHS Trust [2022] EAT 139 which serves as a pertinent reminder of the risks of failing to follow an appropriate process.
Facts
The Claimant, Mrs Mogane, had worked as a nurse for the Respondent under a fixed term contract which had been renewed on a yearly basis. The Respondent had found itself in financial difficulty and was therefore considering potential redundancies as a means to reduce costs. In doing so, the Respondent selected the Claimant for redundancy for the sole reason that her fixed term contract was shortly due to expire and placed the Claimant into a pool of one (meaning she was the only staff member at risk effectively meaning redundancy was extremely likely unless alternative employment could be found). Whilst there were other staff undertaking similar roles on fixed term contracts, the Claimant’s was the only contract due to expire within the near future and this was the basis for selection. The Tribunal initially found that dismissal for the reason of redundancy in light of the upcoming expiration of the fixed term contract was fair. This decision was appealed to the Employment Appeal Tribunal (EAT).
EAT’s Judgement
The EAT held that the Tribunal had erred in their finding that the employee was fairly dismissed where the employer’s sole reason for selection was that her fixed term contract was due to expire before that of her colleague and where no consultation had been conducted before deciding on this selection criteria.
Instead, in order for a consultation process to be ‘genuine’ and ‘meaningful’, the EAT reiterated the underlying principal that consultation should take place at a formative stage where the employee or their representative can potentially influence the outcome. They considered that this did not happen in Mrs Mogane’s case, as the criteria applied by the Respondent prior to consultation had the effect of essentially selecting Mrs Mogane for redundancy as the only employee whose fixed term contract was due to expire. Whilst a pool of one could be fair, deciding on a pool of one before any consultation has occurred runs a substantial risk of rendering dismissal unfair where there is more than one employee potentially at risk. This is something of a departure from prior Tribunal judgements and may be difficult to square with the reality of a number of redundancy situations where an employee is genuinely the only employee undertaking a particular role within the organisation.
What can be taken from the judgement and how should consultation be approached?
Although the formality and extent of any consultation process will likely depend on the size and administrative resources available to the employer, consultation should not be a tick box exercise undertaken at a point where little could realistically be said that could potentially avoid a redundancy.
This decision would appear to place an excessive onus on employers to include a broader pool of those at risk of redundancy than may otherwise be appropriate and it remains to be seen whether or not the decision will remain , but for the time being it serves as a timely reminder to ensure that employers appropriately apply their mind to the relevant selection criteria as well as ensure that they are engaging in genuine and meaningful consultation.
