15 December 2022

The Employment Appeal Tribunal decision in Mogane v Bradford Teaching Hospitals highlighted some persistent risks to employers making redundancy dismissals. Here, we look at two important mistakes the employer was stated to have made in this case: (1) pre-empting the employee consultation process; and (2) using too narrow a range of criteria to decide the redundancy pool.

The claimant in this case was a nurse who had been employed on a series of fixed-term contracts in a clinical trials unit. The employer had decided that redundancies were necessary in order to reduce costs. After some short-term contract extensions to allow for consultation on alternative roles within the parent NHS trust, the claimant was selected for redundancy.

Crucially, in this case, the claimant was the only candidate considered for redundancy, even though there was another nurse employed in the same role on a similar fixed-term contract. The reason for the dismissal of the claimant was that her contract – unlike the other nurse’s – was coming up for renewal.

In 2021, the Employment Tribunal had ruled that this dismissal was fair, stating that, in redundancy situations in which all of the potential candidates are employed on fixed-term contracts, ‘it is within the band of reasonable responses to take a decision based upon which of those is due for renewal’.

However, the Employment Appeal Tribunal (EAT) overturned this decision, finding that the use of a single criterion by which only a single candidate was chosen led to a dismissal that was unacceptably ‘arbitrary’ and therefore unfair.

Consulting early enough

It was noted that a crucial aspect of making a fair redundancy dismissal is the need for a procedure of employee consultation while the outcome can still be influenced. Where there is no collective representation (e.g., by a union), the form of the consultation is not prescribed, but the tribunal will always look for evidence of consultation of some kind. A redundancy dismissal will likely be ruled unfair if consultation did not take place or, as in this case, it took place only after the decision to dismiss had effectively been taken.

Identifying the redundancy pool

In the EAT’s recent decision, the effect of the absence of consultation early in the process was compounded by the fact that the criteria used to identify the pool only produced one redundancy candidate. The EAT was careful to point out that a pool of one is not always unfair; nevertheless, in this case, it was arbitrary, since the consideration of a greater number of relevant factors would have identified a larger pool of candidates.

Points for employers

This decision can be read as a timely reminder to employers to:

Consult with each affected employee individually in advance of any decision to make redundancies, giving time for the overall rationale to be examined and any alternatives to be seriously considered.
Carefully identify all criteria which could be used in deciding on candidates for a redundancy pool; beware of using only one criterion, especially where this would dramatically alter the candidate pool or produce a pool of one.
Inform employees of selection criteria in advance, and maintain transparency about how they will be used to make decisions.
To the greatest extent possible, separate the procedures for (1) selecting a redundancy pool and (2) taking final decisions on who to dismiss.

If you are considering making redundancies and need some assistance with managing the selection process, please contact the team at Synchrony Law.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Redundancy: fair criteria and employee consultation