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Redundancy and alternative employment: Half-measures won’t do
The Employment Rights Act 1996 lists redundancy as a potentially fair reason for dismissal. But the existence of a genuine redundancy situation or a sound selection process doesn’t guarantee a fair dismissal. Employers also have a duty to explore alternatives – especially the possibility of alternative employment. Too often, this part of the process becomes a ‘tick box’ exercise: pointing to a vacancies list and leaving the rest to the employee. A recent case highlights how this approach could render an otherwise fair redundancy dismissal, unfair.
In Hendy Group v Kennedy, the employee was a training manager at a car dealership group and had more than a decade of previous experience as a car salesperson. When his training role was placed at risk, he applied for several internal vacancies – mainly sales roles – but was unsuccessful and later dismissed.
The Employment Appeal Tribunal found the dismissal unfair, despite accepting the redundancy was genuine and the selection fair. The reason? The employer failed to meet its legal obligation to make reasonable efforts to find the employee another role within the business.
Key failings included:
- The employee had to search for vacancies as if he were an external candidate.
- HR provided no help in identifying suitable roles.
- After early rejections, he was told future sales role applications would be unsuccessful as they questioned his motives in applying for them.
- Managers were not informed he was at risk of redundancy.
- Some HR communication went to an email address he couldn’t access.
- There was no evidence of proactive job matching.
The EAT concluded that, had the employer acted fairly, the employee likely would have secured another job and avoided redundancy. He was awarded full losses, with no Polkey reduction (the deduction which can be made to unfair dismissal compensation if a tribunal believes that dismissal would have happened even if the error had not been made).
The takeaway for HR? Properly supporting at-risk employees in finding alternative roles is fundamental to a fair redundancy process. Be proactive, supportive, and transparent.