In brief

The Employment Appeal Tribunal held that a single redundancy required some form of wider workforce consultation, and that this should be the norm for all individual redundancy exercises. Nevertheless, taking into account the facts of this case and long-established case law and rules on collective consultation, we consider that the main point is that consultation takes place with affected employee(s) at a time when it could make a difference. 

Comments

• Where redundancy dismissals are proposed, employers must follow a fair process, which will nearly always necessitate some form of consultation with the individual employees at risk. The consultation process should give the affected employee(s) the genuine opportunity to comment on the redundancy proposal, the pool(s), the selection criteria and their scores (and the employer would need to be seen to genuinely consider any comments made). 
• In addition to the above, special statutory rules apply when an employer proposes 20 or more redundancies in a 90 day period (“collective redundancies“). In those circumstances, collective consultation is required with trade union representatives or, if none, then elected employee representatives.
• In De Bank Haycocks v ADP RPO UK Ltd, the EAT held that there should be “workforce consultation” in cases where the statutory collective consultation rules are not triggered (“individual redundancies“). 
• The EAT did not explain what workforce consultation means, other than that it should be something that happens at the formative stage of an individual redundancy process; i.e., at a point in time where the consultation could make a difference. On the facts of this particular case, this meant consultation with more employees than just the person who had been selected for redundancy following scoring. 
• The EAT’s decision is novel and risks blurring the deliberate legislative distinction between collective and individual redundancies.
• In summary, we do not think that this decision means that all individual redundancy processes must include consultation with a wide section of the workforce. This may be appropriate in some cases but we consider that the key point is that consultation be genuine and that it has the potential to make a difference to the outcome. 
• Where an employer did wish to consult more widely in relation to individual redundancies, a townhall style meeting might suffice, with the opportunity for the workforce to comment on proposals.

Background

In this case the employer needed to make a couple of redundancies following reduced demand as a result of the pandemic. A manager scored Mr. De Bank Haycock’s (DBH) team and he scored the lowest. The employer subsequently commenced individual consultation with DBH. It had not notified him / the team prior to this and did not consult more widely. The employer held three consultation meetings with DBH over two weeks, and dismissed him on the grounds of redundancy following the third. It provided DBH with his scores in his appeal against dismissal.

DBH unsuccessfully claimed unfair dismissal in the employment tribunal; it was accepted that a genuine redundancy situation existed and the tribunal, having heard all the evidence, concluded that it was a fair process. However, the EAT upheld DBH’s appeal, overturning the ET’s decision. 

The EAT held that there must be consultation at the formative stage of a redundancy process; i.e., at a point in time where the consultation could make a difference. Moreover, the EAT held that there should be “workforce consultation” at this point. It expressly said that this could take different forms. The EAT reiterated that the overall test is the reasonableness test in s.98(4) of the Employment Rights Act 1996. However, the EAT concluded that case law and good industrial relations indicate that reasonableness will usually require workforce consultation and that, accordingly, if an ET thinks that it was reasonable for an employer not to conduct workforce consultation in a particular case it should expressly explain why this is so in its reasons. 

As we comment above, we think the EAT’s decision is novel and does not in fact mean that all individual redundancy processes require wider workforce consultation. However, employers should be mindful of ensuring that – even in individual redundancy exercises – employees are given the opportunity to provide input on whether redundancies are required at all as well as on the rationale behind the proposal. 

De Bank Haycocks v ADP RPO UK Ltd, EAT.