22nd March 2018
You’ve got a straightforward redundancy situation. The widget part of the business isn’t performing as well as others and the management team have made a strategic decision to re-focus on other more profitable divisions. You have one Head of Sales for Widgets, supported by several account managers, and a provisional decision has been made to remove this unique senior role. You follow a fair redundancy procedure, indicating that no decision will be made until the end of a consultation process. The Head of Sales isn’t interested in any vacancies, but makes a few comments that one of the account managers should be made redundant instead of him. You decide otherwise, make him redundant and you successfully defend an employment tribunal claim for unfair dismissal.
However, on appeal in the case of Mirab v Mentor Graphics (UK) Ltd, the EAT finds that the employer should have considered offering Mr Mirab an account manager role, bumping another employee out of that role even though it hadn’t been explicitly suggested by Mr Mirab himself.
The EAT re-emphasised that, in a genuine redundancy situation, the fairness of the redundancy will be judged by whether all parts of the dismissal process fell within the range of reasonable responses of a reasonable employer in the relevant circumstances.
Mr Mirab had indicated to his employer some time before his proposed redundancy that he would have considered a change to his responsibilities to those of an account manager to be a demotion and something he would view as constructive dismissal. On the face of it, it appeared that Mr Mirab wouldn’t have been interested in such a role. However, Mr Mirab’s references to making an account manager redundant instead of him meant that a reasonable employer should have at least considered bumping and asking Mr Mirab if he would consider such a role in order to save his employment. It was wrong for the tribunal to have found that an employer has no need to consider bumping either if it has not been explicitly raised by an employee or because the employee hadn’t given any indication that they would accept such a role change. This doesn’t mean that it would always be reasonable for every employer in every case to consider bumping in order to ensure a fair redundancy. However, never make assumptions about what a person at risk of redundancy might accept.
On a separate point, the EAT pointed out that the usual function of an appeal process is to remedy any earlier defects in the dismissal process. However, the EAT also found that a superficial appeal process can of itself make a dismissal unfair. They emphasised that this would not always be the case, but no employer should take such a risk and should therefore always attempt to conduct a fair and impartial appeal process.
The contents of this update are intended as guidance for readers. It can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law, or the content of any website referred to in this update. © Mundays LLP 2018.
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