Why schools must consider Suitable Alternative Employment during redundancy processes

The Employment Appeal Tribunal’s (“EAT”) recently published decision in the case of Hendy Group Ltd v Mr Daniel Kennedy delivers a firm reminder that a fair redundancy dismissal requires proper consideration of alternative employment.

What is suitable alternative employment?

Employers have specific obligations when making an employee redundant, including the need to explore suitable alternative employment options for any employee who is at risk of redundancy if such a position is available or becomes available during the redundancy process.

Suitable alternative employment refers to roles that align with the employee’s experience and skills and their current contractual terms, such as hours, pay and location. If a suitable alternative role is available, an employer cannot make the employee redundant without first offering it to them. Failure to meet this requirement can expose the employer to claims for unfair dismissal.

The law does not require employers to create new roles, but they must support those employees being made redundant by looking at existing vacancies and documenting their efforts to secure alternate work within the organisation.

Facts of Hendy Group Ltd v Mr Daniel Kennedy

Mr Kennedy began working for Hendy Group, a car dealership, in 2013, with 30 years’ sales experience in the industry. From 2015, his role had been as a trainer, training sales teams within the Group.

In 2020, following a restructure largely owing to the pandemic, Mr Kennedy was selected for redundancy as part of a genuine redundancy situation within the Group.

Although Mr Kennedy was proactively applying for other roles within the Group during his notice period, which he was suitably qualified to perform, he was restricted from being successful. On 17 December 2020, Mr Kennedy was dismissed from the Group by reason of redundancy.

Employment Tribunal and EAT decisions

My Kennedy brought an Employment Tribunal claim alleging that he was unfairly dismissed because the Group had not reasonably considered the possibility of him continuing to work for the Group in a different role.

Whilst it was accepted by Mr Kennedy and the Employment Tribunal that it was a genuine redundancy situation and he was fairly selected as being at risk of dismissal, the Group were found to have failed in their obligation to consider Mr Kennedy for suitable alternative employment. This was on the basis that:

• The HR team offered no support regarding other roles within the Group beyond advising that he could apply for jobs along with other external applicants
• His laptop and access to the Group’s internet and emails were removed early in his notice period, meaning he could not access communications sent by HR and limiting his ability to apply.
• Other hiring managers were not informed that he was at risk of redundancy
• A senior manager discouraged further applications, citing doubts about Mr Kennedy’s motivationdespite his evident desire to remain employed
• HR informed him that he would be unsuccessful in further applications for sales roles, despite his extensive sales background.

The Employment Tribunal concluded that there were several positions which were suitable, and Mr Kennedy had proactively sought redeployment, but the Group had not met its obligation to consider him for these roles and were actively blocking him from accessing suitable alternative employment.

It found that if the Group had acted reasonably, Mr Kennedy was likely to have been successful in gaining alternative employment. Hence, the Group was ordered to pay £19,566.73 in compensation and the Tribunal refused to make a “Polkey reduction” (a reduction to reflect the chances that, even if a fair process had been followed, the dismissal would still have been implemented).

This matter was then considered by the EAT in January 2024 who dismissed the Group’s appeal. Even though there were multiple jobs available with the Group in sales in the period between Mr Kennedy being given notice and his dismissal, the Group made no efforts to identify any alternative employment. As such, the approach was described as one which no reasonable employer would have taken.

Key takeaways for schools making redundancies

This case serves as an important reminder for schools to fulfil their obligations in following a fair process when making employees redundant, which goes beyond the initial redundancy process itself.

Schools have a positive duty to genuinely explore and facilitate alternative employment options for employees at risk of redundancy both within the school and with associated organisations if available. Employees should be given sufficient information about the new role and enough time to make an informed decision on whether to take it, perhaps even on a trial basis.

Even if not strictly “suitable” alternative employment, a position which may pay less or be of a different status should also be put forward where relevant. Additionally, an employee’s past preferences and motivation is not enough to justify refusing to search for suitable vacancies for them.

Schools should always document their efforts to evidence where they have made genuine attempts to find suitable alternative employment for employees faced with redundancy.