Although sometimes used as a euphemism for dismissal, “redundancy” is nothing of the sort. It is a reason for dismissal, which may of course be fair or unfair dismissal. Three recent cases have shown that the Employment Appeal Tribunal will take a practical, pragmatic view of what is fair and unfair. The first two are concerned with selection of employees for redundancy dismissal and the third concerns consultation obligations.
First case. The EAT has confirmed that employers do not need to engage in a formal redundancy selection process if there is no “pool” of potentially redundant employees from which to select those to be made redundant (Zeff v Lewis Day Transport Plc on 17 June 2011).
Mr Zeff worked for Lewis Day Transport Plc. Following a downturn of business the decision was made to close what was called “the chauffeur desk”. All three employees who ran that “desk” were dismissed as redundant. One of them, Mr Zeff, complained to an employment tribunal that his dismissal was unfair. He lost – the tribunal said “there was here no question of selection and, therefore, no need for criteria.” Mr Zeff appealed to the EAT mainly on the basis that there should have been a redundancy selection process with formal criteria but has lost. The EAT agreed with the original tribunal that as the “chauffeur” desk was the whole “pool” and Mr Zeff and the two controllers were the only members of the pool (two assistants who were found jobs elsewhere in the organisation were not relevant for this purpose), there was no need for any redundancy selection, no need for any formal selection criteria and no need for any formal selection process.
Second case. The EAT has confirmed that if, after hearing evidence, an employment tribunal has ruled that selection of an employee for redundancy was fair, it will generally not be appropriate to re-examine that ruling (Dabson v David Cover & Sons Ltd. on 9 May 2011). The words used by the EAT were that it would be “inappropriate to use a fine-tooth comb or to subject the reasons of the Employment Tribunal to unrealistically-detailed scrutiny…“.
Third case. The EAT has ruled that for the purposes of redundancy consultation with workers’ representatives (as required by the Trade Union and Labour Relations (Consolidation) Act 1992 s.188), workers’ representatives are properly elected even though there was no formal ballot if the number of nominees is the same as the number of representatives required.
Xtera Communications Ltd identified a need to make substantial cuts to its workforce, including closing a site at Harold Wood. The employees held a meeting at which they identified two people as candidates to be representatives for purposes of redundancy consultation. In the event the consultation process led to reconsideration of the plan to close the Harold Wood site; instead, it would be retained with a reduced workforce. This necessitated two compulsory redundancies. After a ‘scoring exercise’, a Mr Phillips and one other person were selected for redundancy and dismissed.
Mr Phillips lost a claim at an employment tribunal that his dismissal was unfair. He appealed to the EAT on various grounds, chief amongst them being his contention that the pre-redundancy consultation process had breached statutory requirements because the employee representatives had not been “elected” as required by s.188. The EAT dismissed the appeal holding that the “…thrust of the statutory scheme is to ensure that in larger scale redundancy situations the interests of the employees are collectively represented by those of their number whom they have chosen to represent them … But the section nowhere expressly requires that such a ballot be conducted or a vote undertaken in every circumstance“. Clearly where the number of nominees is the same as the number of employee representatives required it follows that there is no need for a formal ballot.
Clearly employers who feel that the employment tribunal system is weighted against them will take heart from these decisions showing as they do that, unless otherwise required by statute or legally binding precedent, employment tribunals and the EAT will interpret the law in a fair, unbiased and sensible way. At least for the moment…