In this bulletin the Jones Chase team set out the key challenges that can be made to a redundancy process in a guide to help ensure that individuals are treated fairly, and employers aren’t caught out by the law.
Challenging The Redundancy Process
With the cost-of-living crisis looming and a potential economic crash on the horizon, things could get more difficult for businesses and employees alike in the second half of 2022. Unfortunately, this could mean that there is a risk of more redundancies happening later this year, with a recent ACAS survey finding that nearly 1 in 5 UK employers are likely to make redundancies before April 2023.
We thought it would be helpful to take a look in this bulletin at the kinds of challenges individuals might be able to make to a redundancy process.
If you are going through a redundancy process, or know somebody else that may be, the points set out below could lead to successful arguments that your dismissal is unfair or that you have been discriminated against or both. These arguments may help you achieve some financial compensation from your employer or might help you to keep your job.
If you are an employer being forced to make redundancies, the points below highlight the key mistakes to avoid and the critical areas where your procedure can be challenged. Please ensure that you are up to speed with these points, to reduce the risk of successful unfair dismissal claims.
The information set out in this bulletin is accurate as of 4 August 2022.
The basics
You have the right to make a claim for unfair dismissal in the Employment Tribunal if you have at least 2 years’ continuous employment with your employer and are then dismissed. You also have the right not to be discriminated against under the Equality Act 2010 because of certain ‘protected characteristics’ (which include sex, race, disability, sexual orientation, religion or belief, age, pregnancy and maternity). Discrimination claims do not require any qualifying period of service.
Set out below are 7 ways to challenge the redundancy process.
1. Is your job redundant?
Our first question would be whether your job is actually and genuinely redundant. If not, then this may make your dismissal unfair. The definition of redundancy is an employer’s reduced need for employees to carry out work of a particular kind. Think about what the particular kind of work is that you do and what rationale your employer has given for why your position is at risk of redundancy. Sometimes employers are not aware of exactly what certain employees do. You may be able to argue that you do not do the kind of work they are looking to reduce and therefore, that your job is not redundant as a matter of law. Plus, if workload is expected to pick up in the near future, that could be a relevant factor to challenging the redundancy process.
It is important to note that employers are allowed to redistribute the work amongst other existing employees. It is the reduced need for the number of employees doing it which is key. If you believe that you are being replaced it would not be a genuine redundancy situation and you may be able to argue that the process is a sham.
2. Genuine and meaningful consultation?
The next question is whether a fair process is being followed, which would include the following:
- Warning and consultation about the proposed redundancy;
- Adopting a fair basis on which to select for redundancy; and
- Considering suitable alternative employment.
During the process you should be given adequate information on which to respond about the redundancy and adequate time in which to respond. Your employer should also give proper consideration to the points you raise during the consultation.
You should be given a chance to challenge your redundancy selection assessment and explain any matters of which your employer might not have been aware, which might have affected your scoring. You should also be allowed to put forward any suggestions for ways to avoid your redundancy.
Therefore, you should attend any consultation meeting with as many creative ideas as possible in this regard and monitor your employer’s reaction to them.
If your employer has a collective agreement in place with a union or a contractual redundancy policy then the employer should be following these processes.
There is no legal timeframe for the consultation (unlike with collective consultation, see below) but the shorter it is, the more likely you could argue that it was insufficient. We would usually suggest that at least 2 weeks would be necessary. Therefore, if your consultation is being rushed through in a matter of days, or there is no consultation at all, that would be an area for challenge.
3. Predetermination
To consult properly, an employer must have an open mind and still be capable of influence about the matters it is consulting on. If it appears that your redundancy is a fait accompli then this would be an area of challenge. Your employer must also not prejudge who will be made redundant before the end of the consultation process. Importantly, please keep your eye open for any evidence or language being used which would suggest that your redundancy is predetermined in this regard, as this can be used to support an unfair dismissal claim. It may be helpful to keep a written record of any evidence or language of this kind, who it was said by and at what stage in the redundancy process it was said.
4. Pool for selection
Fair selection involves the fair application of objective selection criteria to a pool of employees which has been fairly defined. You may be able to challenge the pool of employees in which you are placed for selection. If your role is a standalone, unique role then the pool may be just you and there is no need for selection criteria to be applied. Otherwise, you should be pooled with employees who carry out the same or a similar role to you, or who have the same or similar skills.
Employers often seek to make the pools as narrow as possible to reduce the number of employees affected. However, depending on who else is in your pool you may seek to argue that there are others who perform the same role as you, or others whose skills are interchangeable and should have been included in the pool. This may give you an increased chance of not being selected. You should be given an opportunity to question your inclusion in the pool as part of the consultation process.
5. Selection process
The selection criteria your employer uses during the redundancy process should be as objective and measurable as possible. Your employer should apply the criteria fairly and objectively. The more subjective the criteria, the more opportunity for you to challenge how they are applied to you, particularly if only one manager has conducted the scoring.
Your employer should allow you to contest your scores during the consultation process and before a decision is taken to dismiss. You should, therefore, be given a copy of your assessment against the criteria. This should be broken down for each criterion and an explanation provided as to why you were given the scores. You can ask for the scores of the others in your pool, but your employer is not under a strict legal obligation to provide this. Employers usually provide this information in an anonymised format for data protection purposes. It may help you to see your scores in context.
The criterion of ‘skills’ is commonly used in selection exercises. You may be able to challenge your score if the person who carried out the assessment did not know you. You can argue that they would be unable to validly score you. Also, if there is no reference to your past performance, for example past appraisals or information provided by someone who has managed you, this is an area for challenge.
The use of some criteria may result in discrimination depending on your ‘protected characteristics’. A criterion such as ‘flexibility’ may indirectly discriminate against women or amount to disability discrimination. “Last in, first out” could be discriminatory on grounds of age. With the criterion of ‘absence’ you could argue that particular periods of absence should be discounted, for example, any absence for pregnancy-related illness, maternity or other family-friendly leave, or any absence which is connected with a disability. The employer should also pick a period over which attendance is to be assessed which creates a level playing field.
6. Suitable alternative employment
Your employer should take all reasonable steps to find you alternative employment in the organisation (or possibly within the group if part of a group) and consult with you about it. This can be overlooked by employers and is fundamental to the fairness of a procedure. If you are aware that there were roles available which were not flagged to you or you were not allowed to apply for that might make your dismissal unfair.
If you are at risk of redundancy whilst on maternity leave your employer must offer you a suitable alternative vacancy, if one exists, over and above other employees. You should not have to attend a competitive interview.
Another point which can affect women on or returning from maternity leave is the issue of an employer wanting to keep the employee carrying out the maternity cover and make the woman on/returning from maternity leave redundant. This is very likely to lead claims for unfair dismissal and discrimination so another point to look out for if you are in this situation.
7. Collective consultation?
It is certainly worth asking your employer how many people are being made redundant in total. This is because if there are 20 or more at one ‘establishment’ (which could be a particular office or standalone business area) your employer has a legal obligation to consult over the redundancies with a recognised union or elected employee representatives for a minimum period. The minimum period is 30 days if 20 to 99 employees may be made redundant, or 45 days if there are 100 or more. The employer must also run an election process if there are no existing employee representatives in place.
There is a high financial penalty on an employer for failing to do this or not doing it properly, of up to 90 days gross pay per person, so it is an area worth exploring.
Bespoke consultation
If you are going through a redundancy process, or know anyone else who may be, feel free to contact us should you wish to receive a bespoke consultation on your options. You will receive a tailored plan regarding the steps that you can take to help to protect your position and secure a better future.
Otherwise, if you are an employer and need assistance with running a redundancy process, please feel free to get in touch with us. We would be delighted to assist you and reduce risk.
Jones Chase is a specialist employment law firm based in the centre of London with an excellent track record of looking after those that we assist.
We fundamentally believe in helping both businesses and people with all their employment law needs, hence we are releasing free guides that we hope can be of assistance in this challenging economic climate.
Feel free to contact us should you require further information or need any assistance. We are always happy to speak to people and point them in the right direction.