The implications of failing to follow a fair redundancy consultation process

When it comes to redundancies, employers need to navigate their way through the process to ensure that their practices are fair and transparent. A recent case in the Employment Appeal Tribunal (EAT) serves as a stark reminder of the risks associated with neglecting a fair redundancy consultation process, especially for employees with more than two years’ service. In this article, we explore the key lessons in this case and highlight the importance of adhering to proper procedures.

The case of De Bank Haycocks v ADP RPO UK Ltd (De Banks) [2023] EAT 129 centred around allegations of unfair dismissal due to a flawed redundancy process.

Background

The claimant was made redundant following a selection process in which he came last in the rankings out of 16 employees and was the only employee dismissed as a result of the process. The claimant appealed against his dismissal and complained that he had not been given any information about the selection criteria or his scores. As part of the appeal process, the claimant was shown the selection criteria and his scores were provided but he was not shown any of his comparators scores. The claimant’s appeal was rejected and he brought a claim for unfair dismissal in the Employment Tribunal (ET). The ET dismissed the Claimant’s claims, noting that although there were deficiencies in the initial process, they had been rectified at the appeal stage by the employer providing the claimant with his scores (albeit not providing his comparators scores). The claimant appealed to the EAT.

The EAT scrutinised the employers actions to determine whether they had followed appropriate consultation procedures and found that there had been a lack of meaningful consultation at the formative stages of the process. The EAT reminded employers of the need to consult on all aspects of the proposed redundancy including the proposed scoring criteria. The EAT acknowledged that the  internal appeal against selection was capable of rectifying the failure to have provided the claimant with his scores prior to his dismissal, but it could not rectify the failure to consult about the proposed scoring criteria at a formative stage. The EAT declared that the dismissal was unfair and the case was remitted to the ET for a decision on remedy/financial compensation.

Key Lessons

This case highlights the importance of conducting consultations at the right time and in a meaningful manner. Consultation should cover not just the proposal to make redundancies but the proposed redundancy process including any selection criteria’s. Open and transparent communication is key during a redundancy process. The case also emphasises the significance of thorough documentation. Employers should maintain records of all consultation throughout the redundancy process. This documentation serves as a crucial defence in the event of legal challenges, demonstrating compliance with statutory requirements.

Failure to follow a fair redundancy consultation process poses considerable risks, ranging from financial consequences, which could include severance pay, compensation for emotional distress and loss of future earnings; damage to reputation and legal ramifications. By prioritising timely and meaningful consultations, proactive communication and diligent record keeping, employers can navigate the complexities of redundancy while safeguarding their interests and upholding the principles of fairness in the workplace.