When does an employer need to consider “bumping” in a redundancy situation?
This was the question addressed in the case of Dr Mirab v Mentor Graphics (UK) Ltd UKEAT/0172/17/DA where it was argued that employer should have considered giving the role of a junior account manager to a more senior employee who was at risk of redundancy.
To fairly dismiss an employee on the grounds of redundancy, there needs first to be a genuine redundancy situation and secondly, a fair procedure must be followed. As part of a fair procedure, employers must carry out a consultation process and consider ways of avoiding redundancy, including looking for alternative positions in the business. Employers are, in some circumstances, required to consider “bumping” of employees which essentially means moving an employee whose role is at risk of redundancy into an alternative role and making the original occupier of that alternative role redundant instead. The issue in this case was whether the employer’s failure to consider “bumping” rendered the dismissal unfair.
Dr Mirab was employed by Mentor Graphics UK Ltd (Mentor) as a Director of Sales from February 2013. Following a restructure of the sales force in 2015, Dr Mirab’s responsibilities changed and his sales team was reduced.
In November 2015, Mentor decided that Dr Mirab’s role was no longer required due to the size of his team and the insufficient business opportunity in his sales region. Dr Mirab was informed he was at risk of redundancy because his role was unique within the business and following a period of consultation, he was made redundant.
Dr Mirab brought a claim for unfair dismissal against Mentor but was unsuccessful in the Employment Tribunal. The ET concluded that Mentor had acted reasonably in dismissing him for redundancy including looking for alternative employment. In particular, the ET rejected Dr Mirab’s argument that Mentor should have considered “bumping” an employee out of a more junior Account Manager position in order to give the role to Dr Mirab.
The ET held that Mentor was only bound to consider “bumping” if Dr Mirab himself had raised it and the ET found that Dr Mirab had not indicated he would be willing to consider an Account Manager position. Dr Mirab appealed to the Employment Appeal Tribunal.
The EAT held that the Tribunal was wrong to assume there was a general rule that an employer was not required to consider “bumping” employees in subordinate positions unless raised by the employee. However, the EAT also confirmed that there is no rule that an employer must always consider bumping to dismiss fairly in a redundancy case and that the question will always be for the Tribunal to decide, on the particular facts of the case, whether the employer’s actions fell within the range of reasonable responses.
Points to note
“Bumping” is something that doesn’t tend to be considered by employers in a redundancy situation. It may be that employers feel uncomfortable with the concept of creating a vacancy at the expense of another employee or perhaps employers don’t like to assume the employee at risk of redundancy would be interested in a subordinate, lower paid role. Whilst it is clear that there is no absolute obligation on employers to consider “bumping”, a failure to do so can result in a finding of unfair dismissal. It comes down to what is “reasonable” to do in all the circumstances.
Action to take
1) When looking for ways of avoiding redundancy, consider the possibility of moving the employee into a junior role.
2) During consultation, explore with the employee whether they would consider a junior role at a reduced salary, and if so, whether you need to widen the selection pool due to the possibility of bumping.
3) Remember an employee who has been “bumped” could have a potential claim for unfair dismissal, so ensure that you carry out a fair consultation process with the employee in question.
4) Seek advice if you are unsure whether you need to consider “bumping” or have questions about redundancy process.
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