Introduction
Redundancies are sometimes a necessary step for businesses of all sizes to adapt to changing circumstances. However, it is essential for employers to adhere to a fair and lawful process, particularly when an employee is being made redundant in a "pool of one." In this article, we will explore the critical aspects of redundancy procedures in such situations.
Understanding the Pool of One
The leading and often cited case is Halpin v Sandpiper Books Ltd (EAT/0171/11).
Mr. Halpin worked at Sandpiper Books from 2007, initially as an administrator, and later in 2008, he was assigned to develop book sales in China. When the company decided to outsource this work, Mr. Halpin was at risk of redundancy and was placed in a redundancy pool of one. Sandpiper consulted extensively with him, offered alternative employment, which he declined, and subsequently made him redundant.
Mr. Halpin filed an unfair dismissal claim, but the tribunal found that his redundancy was genuine, and he had been selected fairly, given his unique role as the sole salesperson based in China. Mr. Halpin appealed, arguing that the redundancy pool should have included others with interchangeable skills, but the Employment Appeal Tribunal (EAT) disagreed. His work in China had concluded, and he was potentially redundant. Employers should consider the pool composition carefully, but in unique cases, a redundancy pool may consist of only the job holder.
Consultation is Key
The case of Mogane v Bradford Teaching Hospitals NHS Foundation Trust underscores the importance of conducting a fair redundancy process, especially the duty to consult, even when only one employee is involved. In the Mogane case, redundancy decisions were made based on the remaining duration of fixed-term contracts. The claimant, whose contract was due to expire before her colleagues, found herself in a "pool of one" and was subsequently made redundant.
One critical issue in this case was the timing of the consultation. Consultations should occur before any decisions are finalised, providing the employee with an opportunity to engage in meaningful discussions regarding potential alternatives to dismissal.
The Role of Genuine Consultation
The Employment Appeal Tribunal (EAT) ruled in favour of the claimant in the Mogane case, highlighting the importance of genuine and meaningful consultation in the redundancy process. To conduct a fair consultation, employers must provide sufficient information to enable employees to express their opinions and must allocate adequate time for responses.
Open-Minded Approach
Employers must approach the consultation process with an open mind and be receptive to the views and opinions of the employee. Consultation should not be a mere formality or a tick-box exercise, and decisions should not be pre-determined before engaging with affected employees. Proper consultation allows employees the opportunity to potentially influence the outcome of redundancy decisions.
Reducing Risks and Claims
By conducting thorough and genuine consultation, even in cases where a "pool of one" exists or in smaller businesses, employers can mitigate the risk of procedural errors and potential claims of unfair dismissal. Fair and lawful redundancy procedures are essential not only for the affected employees but also for the overall reputation and compliance of the organisation.
Conclusion
Making an employee redundant, especially when they are the sole candidate in a "pool of one," requires careful adherence to proper consultation and fairness. Employers must follow due process, engage in meaningful discussions, and consider alternative solutions to ensure a fair and lawful redundancy process. This approach not only safeguards the rights of the affected employee but also protects the organisation from potential legal challenges.
Steps to Avoid Potential Claims
When carrying out redundancies as an employer, it is crucial to take the following steps to minimise the risk of potential claims:
- Assess Necessity: Consider whether redundancy is necessary or if alternative solutions, such as restructuring or retraining, are viable options.
- Define the Pool: Clearly define the group of employees who may potentially be affected by redundancy and establish transparent selection criteria should redundancies become necessary.
- Initial Warning Meeting: Hold an initial meeting with the employee affected, warning them of the possibility of redundancy. Initiate the consultation process.
- Engage in Ongoing Communication: Subsequent meetings should follow, where decisions are not finalised, but the employee's thoughts, suggestions, and concerns are actively heard and considered.
- Confirmation Meeting: A meeting should take place to confirm the outcome of the redundancy decision, followed by the provision of a dismissal letter.
- Right to Appeal: Ensure that the employee is informed of their right to appeal the decision. Hear any appeals fairly and promptly.
- Fairness is Key: For a redundancy to be considered fair, it must be the genuine, demonstrable reason for dismissal, and all procedural fairness must be followed throughout the process.
Our Employment Law Team has a wealth of experience advising employers and employees on the policies and procedures around redundancy. If you are a business facing a potential claim, give Nour Belal and her employment team a call on 01256 844888 or email them via our inquiry form on our website.