18 April 2018

Employee does not need to raise 'bumping' in redundancy situation for the employer to consider it

Mirab v Mentor Graphics (UK) Limited UKEAT/0172/17/DA

Why care

When redundancies are being considered, ‘bumping’ means the process of moving an employee who is at risk into another role, and making the employee currently doing that job redundant instead.

In this case it was held that, although there is no general duty upon employers to consider bumping another employee in a redundancy situation unless the employee requests it, it may be reasonable for the employer to do so in order to avoid a finding of unfair dismissal.

The case

The Claimant was employed by the UK subsidiary of a large US-headquartered group as a successful Director of Sales for Embedded Systems, managing a team of six employees. His remuneration was calculated on the team’s performance against annual sales targets.

In February 2015, the sales force of the Division in which he worked was restructured, and the Claimant was told that only one of his team would continue to report to him. He was now required to concentrate on sales to the general sector, and would not earn commission from those team members engaging in the automotive sector (some 70% of the Embedded Systems sales had been to that sector before the restructuring).

The Claimant complained in an email that he perceived this to be a demotion and said that he was not prepared to become simply an Account Manager; having taken legal advice, he understood he had a very good case for constructive dismissal.

The Claimant continued as Director of Sales and a new employee was recruited to his team.

In November 2015, the Director of Worldwide Sales Embedded Systems Division, Mr MacGillivray, together with HR, put together a proposal which would see the Claimant’s role eliminated, because there was insufficient business opportunity in the region and only two employees in his team. The document said that any alternative positions would be considered before termination of employment.

In February 2016, the Claimant was told that although no final decision had yet been taken, it was likely that there would be no continuing need for his role and that he was at risk of redundancy. There would be a period of consultation, during which he was invited to put forward any ideas he might have to avoid that outcome.

Later that day, the Claimant asked Mr MacGillivray if he should still attend the annual sales conference, and asked whether he would be considered for an Account Manager role, assessed on the basis of his own sales. Mr MacGillivray replied that there was no guarantee such a position would be approved for Europe.

There were three consultation meetings with the Claimant during February 2016. The Claimant said that he believed it was an engineered situation designed to single him out, and that he was being unfairly dismissed. Mr MacGillivray disagreed, pointing out that the Claimant had emailed his dissatisfaction and had refused to take an Account Manager role then. The Claimant was sent a link to a list of worldwide vacancies within the Group, and said he had looked at those in Europe but there was nothing suitable (although he said he had not done so when asked by HR). At the end of the third meeting, he was told that it was not possible to avoid redundancy, and given notice of termination.

The Claimant’s internal appeal was not upheld. The Respondent rejected his suggestion that he should be compared to Account Managers outside the UK, saying that it was only required to consider positions in the UK, and in any case, he wasn’t an Account Manager.

The Employment Tribunal found that the Claimant had not raised the possibility of bumping, and had previously said he did not want to be an Account Manager. It ruled that the employer had considered suitable alternative employment, and was under no obligation to consider bumping unless the Claimant raised it.

The EAT upheld the Claimant’s appeal. The Employment Tribunal had been wrong to assume there was a general rule that an employer was no obliged to consider bumping unless the employee asked it to.

Case law was clear that, while there is no rule that the employer must always consider bumping, in some circumstances it would be reasonable for an employer to look for vacancies that might be created – which would include those created at the expense of another employee.

The EAT also said that the Tribunal’s finding that the Claimant had given no sign that he was interested in a more junior position was perverse, given there was at least one indication that he had done so during the consultation process, and other statements made by him could have been construed in this way.

The case will be remitted back to the Employment Tribunal to decide whether in this case it would be within the range of reasonable responses to bump the other employee.

What to take away

It is not the duty of the employee to raise the possibility of bumping – but nor must the employer do so of its own account in every situation. Whether it is within the range of reasonable responses for an employer to consider will depend on the circumstances of the case, which will include the skills and experience of the relevant employees and the resources, expertise and size of the employer.

To be safe, it would be good practice for an employer to consider whether or not this is a case where bumping would work, and to keep a note of the reasoning behind the decision.

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