Fri 12 Jul 2024

Redundancy consultation at a "formative stage" under scrutiny again

Unless redundancy consultation takes place at a time when it can influence the outcome of a redundancy exercise, any dismissals that follow may be unfair.

It does not seem difficult to describe what "meaningful" consultation might be, yet in practice it can be difficult to achieve. In the words of the Employment Appeal Tribunal ("EAT") in Valimulla v Al-Khair Foundation ("the Al-Khair case") to be meaningful, a consultation must take place at a time where it can potentially make a difference, and in such a way that responses to a proposal are considered and reflected upon, prior to a decision being made.

The Al-Khair case

In the Al-Khair case the claimant was a Majid Liaison Officer for an independent charitable organisation based in the North West of England. Three other employees carried out the same role but at different locations. During the Covid pandemic the claimant was made redundant. The employer was of the view that the claimant's role was unique and so he was in a "self-selecting" pool of one. Having decided that, a consultation took place with the claimant on how his redundancy might be avoided, albeit in the end that was not possible. 

When the claimant made an application to the employment tribunal for unfair dismissal, he was unsuccessful. He appealed to the EAT arguing that the tribunal had failed to consider both whether the employer had genuinely applied its mind to the question of pooling and the reasonableness of their approach, and whether the employer had consulted him about being in a pool of one.       

The EAT judgement

The EAT upheld the appeal in regard to these points. The employment judge had not considered whether, on the facts of the case, the employer's decision to place the claimant in a pool of one was reasonable or whether the employer had properly turned its mind to the question of pooling. In regard to the consultation, as the decision on the claimant being in a pool of one was taken prior to the consultation beginning, by the time he was involved the claimant could not make any meaningful proposals on it. This was a key issue in the case and in the view of the EAT the lack of consultation on the pool rendered the dismissal procedurally unfair. However, a number of other issues, including what the outcome might have been had this consultation taken place and other matters relevant to remedy fell to be determined by a different tribunal, and the case was remitted in relation to those matters.      

What does this mean for employers?

Employers are usually given a fair degree of latitude when it comes to identifying pools. However, as this case re-enforces, an employer must genuinely apply its mind to the formulation of the pool and consult on it at a formative stage.  

We have seen a number of cases recently which emphasise the importance of consultation at a formative stage, including that of De Banks Haycock v ADP RPO UK Ltd where a scoring process and the criteria that underpinned it was applied before consultation took place. Although consultation took place on other issues thereafter, the earlier application of the scoring process meant there was no possible outcome other than the redundancy of the employee in question.

If consultation begins at a point where the employee being consulted with is no longer able to influence the outcome, then an employer risks an employment tribunal concluding that the consultation was not meaningful, and that any resulting dismissal was unfair.  

 

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