In the recent case of Hendy Group Ltd v Kennedy [2024] EAT 106, the Employment Appeal Tribunal upheld a Tribunal’s finding that an employee’s redundancy was unfair because the employer had failed to give proper consideration to alternative employment.
There are various steps that an employer must take in a redundancy situation in order to ensure that they are acting fairly and in compliance with their legal obligations.
A fundamental aspect of carrying out a fair redundancy process is to engage in consultation with the affected employees which must include consideration of alternatives to redundancy, including whether there are any alternative positions available. As this case highlights, a failure to consider alternative positions during the consultation process can, of itself, render a redundancy dismissal unfair.
Mr Kennedy had been employed by Hendy Group Ltd (Hendy) as a trainer since 2015. His role involved training for all of Hendy’s sales teams across its various dealerships. He had over 30 years’ experience in the motor trade and when he started working for Hendy in 2013, he worked in used cars and then successfully managed a new distributorship before going on to become a trainer.
In 2020, Mr Kennedy was put at risk of redundancy. He had a consultation meeting in September 2020 during which he was told by the HR team that he could apply for posts advertised on Hendy’s intranet. He was not, however, offered any assistance to apply for any post and no suggestions were made as to posts he could apply for. His line manager said he would speak to anyone that wanted to talk to him about Mr Kennedy but could not assist with any role outside his department (the training academy where Mr Kennedy worked).
Without any help or guidance from his employer, Mr Kennedy applied for number of roles across Hendy’s dealerships. He was successful in getting an interview for a role as a sales manager position in Bournemouth. However, he was rejected for this role on the basis that he was not considered to have the right attributes for the role. The role was given to an existing employee who was not at risk of redundancy.
On 21 September 2020, Mr Kennedy was served with notice to terminate his employment to expire on 9 November 2020. The notice letter made no mention of any possibility of help to find another role. A week after being served, notice, Mr Kennedy had to return his laptop which meant he no longer had access to internal email or the intranet and only had the same access as a member of the public to jobs posted on Hendy’s website.
During the notice period, there were multiple jobs available within Hendy in sales. Mr Kennedy applied for a further three jobs but was unsuccessful in getting an interview for either of them and his employer provided no assistance in this regard. On dealership contacted Mr Kennedy to say they had offered the role to an external candidate because they had no idea he was at risk of redundancy.
Mr Kennedy was dismissed by reason of redundancy on 9 November 2020. On the same day he was dismissed, he received an email from HR confirming that his applications for two sales roles had been successful because they questioned his motivations for applying for a sales role, and that if he applied for more the answer would be the same.
Mr Kennedy subsequently brought a claim for unfair dismissal against Hendy, claiming that his dismissal for redundancy was unfair. He did not dispute that there was a genuine redundancy situation or that his selection for redundancy unfair. His case was that he had been unfairly dismissed because Hendy had failed to properly consider alternative employment for him.
The Employment Tribunal agreed with Mr Kennedy and found that his dismissal was unfair because his employer had not made any effort to find Mr Kennedy alternative employment.
The Tribunal found that if Mr Kennedy’s employer had acted fairly, Mr Kennedy would have been able to find another role within the business. There were multiple vacancies available, Mr Kennedy had extensive experience including in sales and, although he enjoyed training, he wanted to remain employed and wanted the jobs he was applying for.
Mr Kennedy’s employer appealed against this decision to the Employment Appeal Tribunal. Among its grounds of appeal. They argued that the Judge in the Employment Tribunal had erred by substituting his own view in respect of the dismissal, rather than considering whether the dismissal was within the “range of reasonable responses” open to a reasonable employer.
The Employment Appeal Tribunal dismissed Hendy’s appeal, finding that the Judge had not substituted his own view for that of the employer and that the Judge had been entitled to conclude – based on the findings of fact as to how the employer had behaved – that the employer’s approach to consideration of other employment had been one which no reasonable employer would have adopted (i.e. it fell outside the band of reasonable responses).
This case highlights the need to engage in a meaningful discussion with employees during the consultation process regarding alternative positions. It is not sufficient to give an employee at risk of redundancy a list of available vacancies or sign post them to jobs on the intranet and leave them get on with it. A pro-active approach is required. Consultation should involve speaking with employees about where their interests for alternative deployment might lie, helping in identifying other roles and encouraging conversations about other positions even if that means demotion. Assumptions should not be made that, because an available position is of a lower level, the employee will not be interested or that they will not be motivated to carry out that role if they apply for it.
It is also important, particularly in a large organisation where vacancies are across multiple different sites, to let recruiting managers know of any employees who are at risk of redundancy. Further, as this case highlights, an employer must continue to consider alternative employment for an employee during their notice period.
If you like assistance in carrying out a redundancy process, please get in touch with a member of our team. We will help you ensure the correct procedure is followed every step of the way.
You can ready the full judgement here: HERE
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The information contained in this blog post is provided for guidance and is a snapshot of the law at the time it is written. It is provided for your information only and should not be used as a substitute for obtaining legal advice that it specific to your particular circumstances.
The guidance should not be relied upon in any decision making process. It is strongly recommended that you seek advice before taking action.
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