What is redundancy? A redundancy situation arises when a business or organisation: Ceases its operations altogether; or The individual place at which the employee works is closed but the business continues elsewhere; or There is a reduced need for employees to undertake work of the kind for which they were employed. What protections do employees have during the redundancy process? Employees have the right not to be unfairly dismissed where they have worked for their employer for two years or more. If a business wants to make an employee redundant after this time the dismissal will only be “fair” if: There is a genuine redundancy situation AND The dismissal is reasonable having regard to ALL the circumstances of the case. N.B. If 20 or more employees are being made redundant at one establishment within a rolling 90-day period, the employer will also have to comply with the collective redundancy regulations (a more onerous and longer process). What does a fair redundancy process involve? A fair redundancy process generally requires the employer to: Clearly state the business or organisational rationale for the proposed redundancy; Consider and identify the employees affected and whether there are any special circumstances that would impact the employer’s ability to make an individual redundant (e.g. due to pregnancy/ maternity leave) Identify an appropriate pooling of employees and if applicable reasonable selection criteria; and Genuinely engage in meaningful consultation. Alternative employment An employer must take reasonable steps to identify any alternative employment for an employee who is at risk of redundancy. In the recent case of Hendy Group Ltd v Kennedy [2024], the Employment Appeal Tribunal (EAT) considered whether an employer had sufficiently discharged this duty. Mr Kennedy did not dispute that his role was no longer required, but argued that the decision to dismiss him was unfair as the company had not adequately or fairly considered the possibility of him remaining with the Company in an alternative role. Specifically, he complained that: The employer’s efforts were mainly confined to simply advising that he searched the internal job boards; Emails from the employer regarding other jobs were sent to his work account, even though he no longer had access to those emails; Following an interview in which he was unsuccessful he was told he would also be unsuccessful in applying for similar sales-based roles even though many of the sales jobs open for application at that time were likely to be appropriate for him; and Other hiring managers were not informed that his role was at risk of redundancy. The Tribunal upheld his claim and awarded £19,500 in compensation without any ‘polkey’ deductions in favour of the employer. The company appealed the decision to the EAT arguing that the Tribunal had substituted their own views rather than limit their assessment to whether the employer’s failings could objectively be considered as unreasonable. The appeal was rejected. The EAT held that the employer had fallen short of the requirement that it made “reasonable” efforts in finding the employee another role. In addition to the factors referred to above, they also criticised the employer for not seeking more information from the employee and/or encouraging conversations about the employee’s interests to help identify other suitable roles, even if they would result in a demotion. The EAT also held noted that the Employment Rights Act 1996 also required Tribunal’s to take into account the size and administrative resources of an employer. Hendy was a large organisation and there were many job vacancies over a short period. What are the learnings form this case? This case highlights the need for employers to be able to demonstrate they have gone further than simply informing an employee they can apply for vacancies on their website (in the same way as any other candidate). Further steps should also see the employer speaking with ‘at-risk’ employees about where their interests lie to help identify any other suitable roles, even if it could involve a demotion. How can Morr & Co help? If you have any questions or would like any further information on the contents of this article, please do not hesitate to contact our Employment team on 0333 038 9100 or email info@morrlaw.com and a member of our expert team will get back to you. Disclaimer Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position. Authored by Mel McCrum Partner, Head of Department Message Tags Insights Perspectives On this page Related Stories Employment Rights Bill – latest updates View more Contact our team today to find out more get in touch
