A recent judgment of the Employment Appeal Tribunal (EAT) highlights the importance of employers carrying out a genuine redundancy consultation rather than just ticking the procedural boxes.
Mr Thomas was a longstanding and senior employee of BNP Paribas. A strategic review resulted in Mr Thomas, after more than 40 years’ service, being placed at risk of redundancy in a redundancy pool of one. He was immediately put on garden leave and told not to contact colleagues or clients. His limited suggestions to avoid the redundancy were declined. Following confirmation of redundancy, Mr Thomas appealed on the basis that the consultation was a sham and was predetermined. When his redundancy appeal failed he brought claims of unfair dismissal, age discrimination and disability discrimination against the company.
At first instance the Tribunal found that the company had carried out a perfunctory and insensitive redundancy consultation. It had made procedural errors and, hurtfully, had addressed Mr Thomas by the wrong name in correspondence. However, the Tribunal found that despite its perfunctory and insensitive nature, the redundancy process was fair and accordingly the unfair dismissal claim failed.
On appeal the EAT quashed this element of the decision and remitted the case to be reheard. The EAT found it ‘troubling’ that the Tribunal had failed to state why, despite characterising the consultation as perfunctory and insensitive, it still found itself able to consider the process reasonable without explanation.
In the view of the EAT, although a redundancy consultation of such nature would not always be unreasonable, the Tribunal should have explained its reasoning behind its finding. In particular, the Tribunal had failed to address the insensitive approach to consultation taken by the company when it placed Mr Thomas on immediate garden leave.
Mr Thomas’ age discrimination claim – that he was dismissed because of his age rather than genuine redundancy - had failed at first instance and this aspect of the decision was not overturned by the EAT.
The EAT judgment serves as a reminder to employers of the importance of communication and genuine consultation during the redundancy process. Consultation should be a genuine opportunity for an employee to comment on the proposals and suggest alternatives to avoid dismissals.
The judgment also made passing comment on the particular insensitivity of placing an employee with such long service on immediate garden leave. Such action at the beginning of the consultation process will tend to indicate that an employer has already made the decision that that individual will be made redundant; and will not assist an employer in seeking to show that its redundancy process was reasonable and fair.
This is an interesting comment from a practical perspective as employers often tend to routinely put ‘at risk’ employees on paid leave, and this judgment shows that careful thought should be given to this approach, rather than implementing it as a matter of course.
An equally important lesson from this judgment is that in the often uncomfortable circumstances of redundancy, employers must not forget the importance of sensitively handling the process.
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