A recent decision of the Employment Appeal Tribunal has re-emphasised the importance of consulting with employees on relevant aspects of a redundancy process at both a formative stage of proposals and on a workforce level. In Mr Joseph De Bank Haycocks v ADP RPO UK Ltd  EAT 129, the EAT found that an employer who dismissed an employee based on a matrix of subjective selection criteria without giving him the opportunity to challenge or influence the criteria or his scoring had acted unfairly. The EAT also decided that the internal appeal process could not remedy that inadequacy of consultation.
In addition, despite the fact that this was a redundancy situation affecting only 16 people which meant it did not engage the statutory collective consultation regime, the EAT stated that, as a matter of good industrial relations practice, consultation should have taken place at “the workforce level”. In the absence of a good explanation as to why that approach was not taken it determined that the dismissal was unfair. This is an important development of the law in this area, and employers should take note of it.
The Appellant, Mr Haycocks, was employed by the Respondent, ADP RPO UK Ltd, as a recruitment consultant for a single client, Goldman Sachs. In June 2020, the Respondent decided to reduce its recruitment workforce due to the impact of the coronavirus pandemic. The Appellant was one of 16 employees affected by the Respondent’s decision. The Respondent used a matrix of subjective selection criteria, provided by its US parent company, to score and rank the affected employees. The Appellant came last. The Respondent then informed the Appellant and the other at risk employees of the redundancy situation and invited them to individual consultation meetings. The Appellant was not told his score or the scores of his colleagues until after his dismissal on 14 July 2020. He appealed against his dismissal, but his appeal was rejected. He then brought a claim of unfair dismissal in the employment tribunals.
Employment Tribunal decision
The Tribunal dismissed Mr Haycocks’ claim, finding that his employer had acted reasonably in treating redundancy as a sufficient reason for dismissal. The Tribunal accepted that Mr Haycocks was not given his score or the comparative scores of his colleagues until after his dismissal, but held that the appeal process was carried out conscientiously and corrected any procedural flaws. The Tribunal also found that Mr Haycocks had not shown that he should have scored higher or that the selection criteria were unfair. The Tribunal did not address the issue of consultation at a formative stage of the redundancy process.
Employment Appeal Tribunal decision
Mr Haycocks appealed to the Employment Appeal Tribunal, arguing that the Tribunal had erred in law by failing to consider the adequacy of the consultation undertaken by the employer. The EAT allowed the appeal, determining that the Tribunal had overlooked aspects of consultation in reaching its decision. The EAT concluded that the consultation exercise was unfair, as it had not taken place at a formative stage when the affected employees could have had meaningful input on the redundancy situation, the selection criteria and/or the scoring. The EAT also decided that the internal appeal process did not correct the failure to consult at the formative stage. The EAT substituted a finding of unfair dismissal and remitted the case to the same Tribunal for a decision on remedy.
It is well-established that for a redundancy dismissal to be procedurally fair, consultation should take place at an early stage, before any final decisions are made. Where 20 or more redundancies are proposed there must, by virtue of the statutory provisions on collective redundancies, be consultation with the trade unions or employee representatives on a range of specified matters which effectively requires engaging on the reason for the proposed redundancies and the proposed method of selection (which will include both pooling arrangements and the selection criteria to be applied). Where fewer than 20 redundancies are concerned, there must be consultation with each of the affected employees but this has not previously been understood to necessarily involve consultation at the workforce level or at a formative stage of proposals on issues such as the rationale for the redundancies or the method of selection.
However, the EAT decided that as a matter of good industrial relations practice and procedural fairness, employers must consult “at the workforce level” even where the statutory obligation to collectively consult has not been triggered. Moreover such consultation must take place at a formative stage and address issues such as the approach to selection. The EAT’s view was that, had that workforce level consultation taken place in Mr Haycocks’ case, his employer’s use of entirely subjective selection criteria provided by the US parent company would have been challenged and it would have been possible for account to be taken of this in the approach it subsequently applied. In reaching its decision the EAT made reference to some vintage employment case law from the 80’s and early 90’s, including Williams v Compair Maxam Ltd which provided guidance on how a reasonable employer should approach redundancy dismissals, where consultation with trade unions was a common feature of redundancy exercises. Even though it explicitly recognised that the nature of employment had changed radically since the time when those cases were decided, because of the decline in trade union membership levels and a growth in employment with an international element, the EAT still thought this approach ought to be adopted as a matter of good industrial relations practice “in the modern employment environment”.
The EAT declined to be prescriptive about what this revived approach to consultation might actually involve in practical terms but, it is likely to require employers having to (i) facilitate discussions with trade unions or the affected employees (or their representatives) as a collective at an early stage in the consultation process and (ii) engage about the broad redundancy proposals and approach to selection rather than just their application. This additional step, if truly required to be adopted by employers, will almost certainly add to the overall timeframe and costs associated with smaller scale redundancy processes. Crucially it would appear that a failure to take this approach (without compelling excuse) will run the risk of any individual redundancy being found to be unfair.
It may well be that this decision will be appealed further or subject to comment from the superior courts but in the meantime, employers would be well advised to take note of this approach and to factor it into any proposed redundancy exercises in 2024.