Haycocks v ADP RPO UK Limited: “As it was” on individual redundancy consultation requirements

The Court of Appeal has confirmed in Haycocks v ADP RPO UK Limited that workforce level consultation is not required for an individual redundancy dismissal to be fair. The Court of Appeal’s decision provides useful clarification of an employer’s obligations in relation to consultation for smaller scale redundancies.

Background

The respondent employer, ADP RPO UK Limited (ADP), ran a recruitment process outsourcing company for the London office of Goldman Sachs. The Claimant was employed by ADP but, following the onset of the coronavirus pandemic, was made redundant. The Claimant brought an unfair dismissal claim against ADP but his claim failed. As we reported in a previous Law-Now, Back to the Future?, the Claimant appealed to the Employment Appeal Tribunal (EAT) which reversed the tribunal’s decision and made a finding of unfair dismissal on the basis that consultation had been inadequate. This was due to a lack of consultation at a formative stage and at “workforce” level. ADP appealed the EAT’s decision, and the Court of Appeal restored the previous finding of the tribunal that the claimant had been fairly dismissed. 

The consultation process

When ADP determined a number of redundancies needed to be made, employees were assessed on a redundancy selection criteria matrix. The Claimant had the lowest overall score of the relevant employees. ADP determined that two redundancies would be required and  notified all staff in the selection pool that they were at risk of redundancy. There followed a 14-day consultation period at the end of which ADP’s decisions were communicated.

At an initial meeting, the Claimant was informed that he was at risk of redundancy and informed of the business rationale, which was “changing workload along with our reduction in client needs”. The Claimant was told that he would have an opportunity to ask questions and suggest an alternative approach. Shortly after the meeting, the Claimant was given this information in writing which also stated that no formal decision would be made until the consultation process was complete and that a selection matrix would be used (although the scoring process had, in fact, already been carried out). The Claimant was also notified of vacancies within ADP, which were not suitable for him. At the end of the consultation period, his dismissal for redundancy was confirmed.

Employment Tribunal Decision

The Claimant brought a claim for unfair dismissal in the Employment Tribunal. He asserted  that the reason he was dismissed was due to a falling out he had with Goldman Sachs’ Head of Securities Recruitment, not due to his position being redundant. He alleged that the score given to him was “contrived and manipulated to achieve the end desired”. He also alleged that ADP had not carried out the redundancy process using fair and proper procedures. The Employment Tribunal dismissed the claim on the basis that the Claimant did not show that he ought to have scored higher on the selection matrix, nor that there was more than a possibility of knowledge of the falling out he had with the Goldman Sachs’ Head of Securities Recruitment. Although there were procedural flaws, these were corrected on appeal.

Employment Appeal Tribunal Decision

The Claimant then appealed to the EAT. The appeal was upheld on the grounds that there was no “general workforce consultation” at a “formative” stage in the redundancy process. This meant that there was no opportunity to discuss the prospects of a different approach to any aspect of the generally applicable aspects of the redundancy process chosen by the employer.  In the absence of an explanation for omitting workforce level consultation, the EAT considered that the consultation process was inadequate. Crucially this omission could not be rectified by either the individual redundancy consultation or appeal process which had taken place in this case and the EAT accordingly substituted a finding of unfair dismissal.

Court of Appeal Decision

ADP further appealed this decision to the Court of Appeal, challenging the EAT’s proposition that there is a requirement for general workforce consultation in the context of smaller scale redundancies. The Court of Appeal has now upheld the appeal.

The Court of Appeal did not accept the EAT’s finding that it is a requirement of good industrial relations practice or the usual standard to carry out general workforce consultation in the case of smaller scale redundancies in non-unionised workplaces.

While group meetings might be a useful way of ascertaining the views of employees on proposed redundancies, the appropriateness of any such group meetings would depend on the circumstances, and it was necessary to consider the adequacy of consultation on case-by-case basis.

As to the timing of consultation, the Court of Appeal considered that consultation does not necessarily have to take place at an early stage, but simply at a point where the employer still has an open mind. Whether this is so will require an assessment of the particular facts of a case.

Comment

The decision of the Court of  Appeal clearly rejects the proposition that, in smaller scale  redundancies (that is, fewer than 20 within a 90-day period) where the collective consultation rules do not apply there is a requirement for general workforce consultation. While consultation should cover issues “common” to the affected employees (such as selection criteria) as well as issues particular to the individual (such as their own score) and this should take place at a stage when the decision-maker remains open-minded as the outcome, it is possible for this to be dealt with by way of individual consultation only and a procedural unfairness can be cured by a fair appeal process.

The clarification that general workforce consultation is not required in smaller scale redundancy situations and the reversion to the previous wisdom that consultation in such situations can be dealt with at individual level will come as a significant relief to employers. The case is, however, a useful reminder of the need to engage in  meaningful consultation in any redundancy process.

This article was co-authored by Ambrin McBrinn, a trainee solicitor in the CMS Employment team.