At a glance
- In Haycocks v ADP RPO UK Ltd the EAT explored the interplay between reasonableness and consultation in a redundancy situation.
- A reasonable employer will seek to minimise the impact of a redundancy situation by limiting numbers, mitigating the effect on individuals or avoiding dismissal by engaging in consultation.
- General workforce consultation should take place at a formative stage.
- The absence of meaningful consultation at a stage when the employees have the potential to impact on the decision is indicative of an unfair process and cannot be corrected on appeal.
- International employers carrying out redundancies in the UK need to give consideration to good industrial relations practice in the UK.
The employer is a recruitment business, the UK subsidiary of a US company which employed 50-60 employees. The claimant was one of 16 people employed in the UK to recruit employees for a single client company, Goldman Sachs. In early 2020 because of the COVID pandemic demand for new employees to be recruited diminished and at the end of May 2020 the decision was taken to reduce the recruitment workforce.
The US parent company gave the UK manager a standard matrix of criteria for selection. The 16 person team was scored against 17 subjective criteria and the claimant came last. On 18 June the decision was taken to reduce the team by two roles. On 19 June the employer set a timetable for the redundancy process with an initial consultation meeting on 30 June followed by a consultation period of 14 days.
The claimant was invited to two consultation meetings and at a further meeting on 14 July was given a letter of dismissal. He was not given his selection scores until after dismissal. He brought a claim for unfair dismissal which was unsuccessful in the employment tribunal.
On appeal, the EAT reviewed the authorities on the interplay between consultation and fairness and distilled the following principles:
- The employer will normally warn and consult either the employees affected or their representatives;
- A fair consultation occurs when proposals are at a formative stage and where adequate information and adequate time to respond is given along with conscientious consideration to the response;
- The purpose of consultation is to avoid dismissal or ameliorate the impact;
- A redundancy process must be viewed as a whole, and an appeal may correct an earlier failing making the process as a whole reasonable;
- The ET’s consideration should be of the whole process, also considering the reason for dismissal;
- It is a question of fact and degree as to whether consultation is adequate and it is not automatically unfair that there is a lack of consultation in a particular respect;
- Any particular aspect of consultation is not essential to a fair process;
- The use of a scoring system does not make a process fair automatically; and
- The relevance or otherwise of individual scores will relate to the specific complaints raised in the case.
Reasonableness reflects good industrial relations practice. The substance of what amount to good practice will vary widely depending on the type of employment, the workforce and the circumstances giving rise to the redundancy situation but there are certain key elements. A reasonable employer will seek to minimise the impact of a redundancy situation by limiting numbers, mitigating the effect on individuals or avoiding dismissal by engaging in consultation.
In this case, there was a clear absence of consultation at the formative stage. 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 the employees have the potential to impact on the decision is indicative of an unfair process. There was no good reason here for this consultation not to take place. While the appeal could correct any missing aspect of the individual consultation process, it could not repair the gap of consultation in the formative stage.
The EAT observed that the notion of good industrial relations will vary significantly between nations. In this case, a selection matrix using entirely subjective criteria, which came initially from the USA, may not reflect the usual practice in the UK.
Consultation in a redundancy situation should take place at a formative stage where an employee or representative is given adequate information and time to respond and where genuine consideration is given to the response. Lack of such consultation is not an error which can be corrected on appeal.
International employers carrying out redundancies in the UK need to give consideration to good industrial relations practice in the UK.
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