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Employment Appeal Tribunal finds lack of consultation before redundancy dismissal ‘not unfair’

Posted by simontoffel on December 7th, 2012

Clients of human resource consultants such as those at Employee Management Ltd (http://www.employeemanagement.co.uk) might have ordinarily concluded that a failure to consult with an employee facing redundancy would be unfair. However, a recent decision by the Employment Appeal Tribunal (EAT) has suggested that in very limited circumstances, such consultation may not be appropriate or necessary if such an exercise would be futile – even more so if the employee is a very senior one.

This interesting change management case study involved a Claimant who had been employed as a Head of Human Resources and Payroll and known by the title of Associate Director. In the wake of a significant reduction in revenue at his company, major changes were made across the entire business. One consequence of the restructure was the creation of the more senior post of HR Director, which was offered not to the Claimant, but instead to an individual possessing more than two decades of experience in senior HR roles and a Masters Degree in Management Development. The Claimant was not told of or interviewed for the position, and nor was the vacancy advertised.

The company decided that the Claimant’s payroll responsibilities could be taken on by the Payroll Manager, with his other tasks being made the responsibility of the Legal and Operations Director. As a result, the Claimant’s role was made redundant and he was dismissed – without consultation or warning – on the grounds of redundancy, following which the Claimant issued a claim for unfair dismissal.

The subsequent employment tribunal saw the Claimant argue that he should have been consulted with by his employer, and that he should have, at the very least, been interviewed and considered for the new post of HR Director, if not immediately appointed. However, the tribunal held that “consultation with the claimant would serve little purpose and would have been a sham which would not have been to the Claimant’s benefit” and dismissed the claim for unfair dismissal – with the Claimant appealing to the EAT in response.

The EAT, however, agreed with the tribunal as to the futility of consultation with the Claimant, dismissing the appeal on the grounds that “this was, in truth, a case far from the ordinary case of redundancy selection; it concerned a manager in a very senior post which was being lost due to a substantial reorganisation”. Despite the company not consulting with or warning the Claimant, the dismissal was therefore fair.

Here at Employee Management Ltd (http://www.employeemanagement.co.uk), our HR specialists would still urge this decision to be viewed with caution by employers. In most cases, it would remain advisable of companies to minimise the risk of employment tribunals arising from claims for unfair dismissal, simply by properly consulting with their employees. Contact us now for more informed employment law advice.

Editor’s Note: Employee Management Ltd (http://www.employeemanagement.co.uk) is represented by the search engine advertising and digital marketing specialists Jumping Spider Media. Please direct all press queries to Louise Byrne. Email: louise@jumpingspidermedia.co.uk or call: +44 (0)20 3070 1959 / +34 952 783 637.