Redundancy consultation

Redundancy is one of the five potentially fair reasons to dismiss an employee. For a redundancy dismissal to be fair, an employer must show that it warned and consulted the employee over the potential redundancy, adopted reasonable selection criteria (including a fair selection pool) and looked for suitable alternative employment. The decision to dismiss must fall within the range of reasonable responses open to the employer in the circumstances. The Employment Appeal Tribunal (EAT) has recently looked at a case where consultation took place too late and rendered the dismissal unfair.

In Mogane v Bradford Teaching Hospitals NHS Foundation Trust, the employee was a band 6 nurse in a research unit which needed to reduce staff to cut costs. The employee and one other band 6 nurse were employed on fixed term contracts. The employer decided to create a selection pool of one – the claimant - because her contract expired earlier. Only then did the employer start consultation on suitable alternative employment. There were no alternative jobs, so the employee was made redundant. She brought an unfair dismissal claim which she lost.  The tribunal said that it was reasonable for the employer to base the dismissal decision on contract expiry dates where all relevant employees are on short-term contracts and the employer is struggling financially and needs to reduce staff at that level. The employee appealed.

The EAT agreed with the employee. They accepted that there was a redundancy situation and a need to lose a member of staff. However, the selection process was unfair. In order to be meaningful, consultation should take place at a formative stage, where the employee can still, in principle at least, have an impact on the outcome. In this case, the employer chose a redundancy pool which contained only the employee. The pool immediately identified who was going to be dismissed. The employer only started consultation after that decision was made. Consultation thereafter could not be meaningful. The employee had been unfairly dismissed.

This case shows the importance of meaningful consultation. Consultation must take place at the beginning of a redundancy process before any decisions are taken about who is going to be dismissed and when the employee can still influence the outcome. Whilst redundancy pools of a single employee may sometimes be fair (for example, if the role to be cut is a standalone role),  it wasn’t in this case where there were two nurses working at the level where cuts were needed. Employers must take great care when choosing the selection pool and ensure that consultation starts before any decisions are taken about who is going to be made redundant.