Small-scale redundancies do not require “general workforce consultation”

Mr De Bank Haycocks ('DBH') was employed by ADP RPO UK Ltd ('ADP') within a team of 16 recruitment consultants in London. ADP faced a downturn in demand during the COVID-19 pandemic, leading to the need for redundancies within the team in which DBH worked.

Prior to commencing consultation, ADP assessed the team in line with a redundancy selection criteria matrix, resulting in a score for each employee. DBH received the lowest overall score. ADP then determined they required two redundancies in the team. As DBH had scored the lowest, he was one of the employees provisionally selected for redundancy.

A period of individual consultation commenced. DBH attended an initial consultation meeting with ADP to discuss the selection criteria and process they would use to determine which role(s) would be made redundant. He would be given the opportunity to ask questions at subsequent meetings and was given a selection matrix criteria example. DBH had a further consultation meeting and was dismissed for redundancy in a third meeting. However, throughout this process DBH had not been told what his scores had been, who had done the scoring or what information it was based on, nor had he been told that a scoring exercise had been carried out before consultation had started.

DBH exercised his right of appeal and, following consideration of the matters, his complaints were rejected on the basis that the selection process had been thorough and applied fairly. During the appeal process DBH was told his score but not comparative to other employees.

DBH brought a claim for unfair dismissal.

In the Employment Tribunal 

DBH argued that his dismissal was unfair for a number of reasons, including that there were procedural failures in the redundancy process. In particular, that he had not been given the opportunity to challenge his scores during consultation. The Employment Tribunal ('ET')  dismissed DBH’s claim considering that, overall, it was a fair redundancy process. The internal appeal process had been a conscientious investigation of the matter and made up for DBH not knowing his scores until his appeal. Further, once his scores were known, DBH had been unable to demonstrate that his score should have been higher or that others’ scores should have been lower.

In the Employment Appeal Tribunal 

DBH appealed to the EAT, which upheld DBH’s appeal, finding that his dismissal was unfair on procedural grounds. In what was considered a somewhat controversial decision, it stated that “general workforce consultation” (i.e. consultation on issues common to the workforce such as how to minimise redundancies or the overall process) is a reflection of good industrial relations and should generally occur at the formative stages of a process. It then went on to create, in effect, a presumption that “general workforce consultation” should be the usual standard for consultation in small-scale redundancies, unless the ET could provide reasons otherwise. It did not, however, provide any guidance as to what “general workforce consultation” should look like in practice.

The EAT also considered that the redundancy appeal process was not able to repair what it perceived as a lack of consultation at the formative stage.

In a helpful development for employers, the Court of Appeal has now overturned the EAT's decision and restored the ET's original ruling that the dismissal of DBH was fair. In doing so it held that:

1. “General workforce consultation” is not a legal requirement for smaller-scale redundancies in a non-unionised workforce. This was for various reasons, not least because it was unclear what was meant by “general workforce consultation” and employers would need more detailed guidance if this were to be the recognised standard in all redundancy situations. Any such new standard would be more properly addressed by legislation or ACAS guidance. The adequacy of consultation in an individual redundancy process must still be considered on a case-by-case basis.
2. The EAT’s reasoning and decision did not fall within the scope of the only ground of appeal put to it. The EAT had essentially decided the appeal on a new argument which had been put forward by the EAT itself and not by DBH.
3. The redundancy appeal hearing rectified earlier procedural failings in the process run by ADP. Although ADP had calculated DBH’s scores before the consultation exercise began and had not consulted him about those scores during the redundancy process, the overall dismissal was considered fair. This was because of the conscientious and careful consideration of DBH’s complaints about the scoring exercise during his internal appeal. Conversely, if ADP had not been prepared to reconsider this exercise on appeal, then the process would likely have been unfair since the decision would effectively have been set in stone before the consultation began. 

In a return to the status quo, this decision will come as relief to non-unionised employers, who are not required to conduct “general workforce consultation” in small-scale redundancies for such dismissals to be fair. The adequacy of consultation as part of the process for an individual redundancy dismissal to be considered “fair” will depend on the facts and circumstances in each case. As a brief reminder, fairness will be found where the employer can demonstrate that there is a genuine redundancy, a fair process has been followed and the employer has acted reasonably in all the circumstances. General principles continue to apply for non-unionised employers such as (a) warning and consulting employees about proposed redundancies, (b) adopting a fair basis for selection (using fair pooling and selection); and (c) considering ways to avoid the dismissals including suitable alternative employment.

The case also provides some useful key reminders for employers:

• Consider if group-level consultations would be helpful: Although “general workforce consultation” is not required, group meetings may still be a useful way of ascertaining the views of employees where there are “common issues” (such as ways of avoiding the need for redundancies and selection criteria). However, the appropriateness of such meetings will depend on the circumstances, while individual consultation should still offer employees an opportunity to address common issues.
• Think about how to undertake selection and scoring exercises: As a matter of good practice employers may want to give employees an opportunity to comment on the selection criteria to be used before scoring and their scores during consultation. However, the Court of Appeal has demonstrated that a failure to do so will not automatically cause a dismissal to be unfair, provided the consultation process overall allows the employee to influence the outcome.
• Consider the timing of consultation: Employers should consult at a “formative” stage of the decision-making process. The Court of Appeal considered what is meant by “formative” in this context, concluding that it did not necessarily equate to early consultation in a temporal sense; rather, what matters is that the employer maintains an open mind throughout the process, and that consultation is undertaken at a point when the employee can realistically still influence the decision.
• Appeals: The case emphasises that giving a right of appeal to employees, and undertaking a thorough investigation at appeal, can help demonstrate fairness and assist in repairing earlier procedural errors.

Although this case relates to small-scale redundancies within a non-unionised workforce, it is worth noting that there are proposed reforms to the trigger for collective redundancy consultation in the Employment Rights Bill. In short, the proposals will likely increase the number of collective consultations across multi-site employers and the remedies for breach are set to increase. For more information about these changes, and the Employment Rights Bill more generally, please navigate to our Labour Government Policy Hub.

If you have any questions about this case or if you are undertaking any redundancies and need advice, please do not hesitate to get in touch with your GQ|Littler contact.