Soundbite: EAT decision

EAT decision – employers must actively help redundant employees to find alternative work to avoid unfair dismissal

The Employment Appeal Tribunal (EAT) has recently confirmed a Tribunal decision that a dismissal for redundancy was unfair because the employer had failed to consider alternative employment.   The EAT also confirmed that the decision not to reduce losses to reflect the possibility that Mr Kennedy would have been redundant any way should stand.

In Hendy Group v Kennedy, Mr Kennedy was employed as a trainer within the Hendy Group Training Academy.  He had 30 years’ previous experience in the motor trade, specifically sales.  He had started working for the Hendy Group in 2013, and had been in his current training role since 2015.

In 2020, a redundancy situation arose.  Mr Kennedy accepted that the redundancy situation was genuine, but argued that the Hendy Group had failed to comply with its duty to consider alternative employment.  All the Hendy Group had done, was told Mr Kennedy that he could apply for posts listed on their intranet.  He was treated like any applicant, whether internal or external.  He applied for one job, but was rejected on the grounds that the interviewing manager was not convinced of his desire to lead and motivate a team.  He was also concerned about Mr Kennedy’s long commute.  Instead, an internal applicant not at risk of redundancy was appointed to the role.  This then influenced all other applications he made internally.  Mr Kennedy was not given any assistance with his applications for other roles, either by HR or his manager.

Mr Kennedy applied for other internal jobs, but wasn’t interviewed and the jobs were given to other candidates not at risk.  The Tribunal also found that Hendy Group were influenced by a conversation with Mr Kennedy a year previously where he had expressed how much he liked his training role and would ideally wish to carry it on.  The Judge was unimpressed with the reliance placed on this conversation by the Hendy Group when considering alternative employment, accepting that Mr Hendy’s view had changed when faced with redundancy.

The Judge was also critical of an email sent by HR to Mr Kennedy, which effectively told him he would not secure a sales related role at the Company.  The Judge found that HR should have been supporting Mr Kennedy in his attempts to secure an alternative role and that it was “hard to imagine anything less helpful”.

As a result the Tribunal found for Mr Kennedy and he was awarded just under £20,000 in compensation.  The Hendy Group appealed on 3 grounds, that the Tribunal had applied the incorrect test when considering if the Hendy Group had properly considered alternative employment, whether the Judge had substituted his own view in respect of dismissal rather than consider if the decision fell within the range of reasonable responses and that the Judge had erred in law in not making a reduction to compensation to reflect the chance that Mr Kennedy might have been dismissed any way had a fair process been followed.  All grounds of appeal failed.

What should employers do?

1. Alternative employment.  Wherever there is a redundancy situation, it isn’t enough to simply provide a list of vacancies.  Employers should actively look for alternative employment and, only if no alternative employment can be found, dismiss for redundancy.  Where an employee has the skills to do a role, it should be offered to them over and above any other candidate not at risk of redundancy.
2. Reasonableness.  To avoid unfair dismissal, an employer must act reasonably in all the circumstances.  Here, despite Hendy Group being a large organisation with significant resources, they took no real action to help Mr Kennedy find alternative work.  It is important for employers to act reasonably in all the circumstances.
3. Don’t judge or make assumptions.  In this case, Mr Kennedy was deemed unsuitable for sales roles despite his role involving training staff in sales.  Here, the Hendy Group relied on past conversations about Mr Kennedy’s preferences and allowed this to prejudice their views on his commitment to a sales job.
4. Keep a record.  We recommend keeping a record of roles considered and why they weren’t suitable, discussions with employees about alternatives, support provided during the process and the decisions made/reasoning behind the decisions in order to demonstrate that the employer has complied with their duty to consider alternative employment.

In this case, there was no reduction to losses to reflect the fact that dismissal may have occurred any way, as the Judge concluded that if Hendy Group had properly considered alternative employment, he would more likely than not have secured another role within the company.

If you are currently considering redundancies and would like some assistance with the process, please get in touch with a member of the team.