Why the case matters

It is relatively well-known that employers have a duty, in individual redundancy situations, to consider whether there is suitable alternative employment before dismissing an employee. Failure to do so is likely to render the dismissal unfair. Here we report on a useful example of when an employer failed to properly look for alternative employment. The EAT did not agree that the tribunal had substituted its own view and felt it had adopted the correct approach when finding the dismissal to be unfair.

Facts

Mr Kennedy worked for Hendy Group Ltd (Hendy) as a trainer for car salespeople. With 35 years’ experience in the industry, he had spent many years prior to this as a car salesperson. Hendy is a large, national company with offices in many UK cities.

Mr Kennedy was told that his role was likely to be made redundant and took part in two consultation meetings. It was a genuine redundancy and no other employees were in the pool. Just over a week later, his dismissal was confirmed and he was required to return his laptop, and for the rest of his notice period, he no longer had access to the company intranet.

Mr Kennedy spent the remainder of his notice period looking for jobs within the company, which he applied for under his own steam without facilitation from HR. He was unsuccessful for the two interviews he attended. In part, the interviewing managers could not understand his motivation for applying for these roles on the shop floor. When Mr Kennedy failed to secure an alternative role, his dismissal went ahead and he claimed unfair dismissal. 

Decision

An employment tribunal upheld Mr Kennedy’s claim for unfair dismissal on the basis that Hendy had failed to look for suitable alternative employment. When Hendy appealed to the EAT, the EAT held that the tribunal had been entitled to come to this conclusion. There were several ways in which Hendy fell short, in particular:

The Human Resources team took no active steps to help Mr Kennedy, such as conducting a search for him or making suggestions. Neither did it reach out to colleagues, explaining Mr Kennedy was at risk of redundancy, or facilitate interviews. By contrast, Mr Kennedy was proactive.
Once Mr Kennedy’s laptop was returned, he had no access to his work email and could not access the intranet. He was much like any member of the public, applying for jobs as if he was an external candidate.

The employment tribunal found that if Hendy had properly considered alternative employment, Mr Kennedy would have secured alternative work. On this basis, no deduction (known as a Polkey deduction) was made to Mr Kennedy’s compensation, to reflect a chance that he would have been made redundant in any event.

Comment

This case should be a warning, particularly to large employers, that the duty to look for alternative employment involves a degree of genuine proactivity on the part of the employer. Simply directing an employee at risk of redundancy to a portal or jobs board may not be enough, particularly if there is a question mark over why the person would be applying for a slightly different role in the first place. The role of HR should be to facilitate rather than be a passive bystander. The decision not to give Mr Kennedy access to his emails or the jobs intranet was also not joined up and contributed to the dim view taken by the tribunal. In a redundancy situation, employers should:

identify any suitable alternative roles and engage with the employee
facilitate access to the hiring managers and set out the context as appropriate
ensure that access to digital and other resources remain in place throughout the notice period.