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14 November 2012

To consult, or not consult? That is the question

A recent decision of the Employment Appeal Tribunal (EAT) has held that a redundancy dismissal without any prior warning or consultation was not unfair.

The facts

The Claimant in this case had been employed by the Respondent company as the Head of Human Resources and Payroll and was known by the title of Associate Director.

Following the economic downtown, the Respondent’s revenue was significantly reduced and fundamental changes were consequently implemented across the entire business.  As part of the restructuring, a new and more senior role of HR Director was created and offered to another individual, who had a Masters Degree in Management Development and 20 years of experience in senior HR roles. There was no advertisement of the vacancy; the Claimant was not told of or interviewed for the position.  

The Respondent decided that the Payroll Manager could absorb the Claimant’s payroll responsibilities, and other company administrative tasks for which the Claimant had responsibility could be undertaken by the Legal and Operations Director.  Consequently, the Claimant’s role was redundant and he was therefore dismissed on grounds of redundancy without warning or consultation.  The Claimant issued a claim for unfair dismissal.

The ET decision

At the employment tribunal, the Claimant argued that his employer should have consulted with him and that he should have been appointed to, or at the very least interviewed and considered for, the new HR Director role.  At the hearing, the tribunal dismissed the claim for unfair dismissal, holding that, “consultation with the claimant would serve little purpose and would have been a sham which would not have been to the claimant’s benefit”.

The Claimant appealed to the EAT.

The EAT decision

The EAT dismissed the Claimant’s appeal.  It agreed with the ET that in this instance it would have been futile to have consulted with the Claimant, with the EAT noting that, “this was, in truth, a case far from the ordinary case of redundancy selection; it concerned a manager in a very senior post which was being lost due to a substantial reorganisation”.

The dismissal was therefore fair, despite the company having not warned or consulted with the Claimant.

Comment

This case illustrates that, in some (limited) circumstances, it may not be necessary or appropriate to consult with an employee facing redundancy where that consultation process would be futile, particularly if the employee is very senior.  However, this decision should be approached with caution as in the majority of cases it will still be advisable for employers to properly consult with employees, in order to avoid a finding of unfair dismissal.

A copy of the EAT judgment is available here.