Why the case matters

The case below concerns the decision to select an employee as redundant for the sole reason that her fixed-term contract was due to end prior to her colleague's. The decision of the Employment Appeal Tribunal ("EAT") is an important reminder that employers need to consult with employees before deciding to dismiss for redundancy. In the event the selection criteria adopted creates an at-risk pool of one employee, employers should ensure the employee is able to participate in the consultation and employers should consider whether other employees should also be in the at-risk pool.

Facts

Bradford Teaching Hospitals NHS Foundation Trust (the "Trust") was going through financial difficulties and as a result, started a redundancy process. The Trust employed two level 6 nurses, including Ms Mogane, both of whom were employed on fixed-term contracts.

The Trust invited Ms Mogane to a meeting at which she was told about the financial difficulties the Trust was facing. Shortly afterwards, Ms Mogane was advised that she would be dismissed as redundant because her fixed-term contract was due to expire before her colleague's. The redundancy consultation process that followed focused on the search for alternative employment within the Trust. There was no consultation regarding the selection criteria used. Ms Mogane did not accept the alternative role available and was dismissed.

Decision

Ms Mogane brought a claim for unfair dismissal in the Employment Tribunal ("ET") but was unsuccessful. Ms Mogane successfully appealed to the EAT.

The EAT found that adopting one selection criteria which automatically decided (i) the pool of employees and (ii) which employee was to be dismissed, without any consultation before that decision was made, was unfair.

The EAT found that it is well established that consultation is a fundamental aspect of a fair redundancy procedure. In order for the consultation to be genuine and meaningful, it must take place at a formative stage when an employee can still potentially influence the outcome. In Ms Mogane's case the selection criteria had effectively decided the redundancy outcome, meaning she could not realistically have had an impact on the outcome. As the decision to select her for redundancy was pre-determined by the selection criteria, her dismissal was not within the band of reasonable responses required for a dismissal to be fair.

The EATs also noted that the implied term of trust and confidence requires employers do not act arbitrarily towards employees in the methods of selection for redundancy. In this case, the EAT clearly felt that the Trust acted in an arbitrary way. It found that the ET had failed to explain why it was reasonable to decide, without consultation, that Ms Mogane was to be made redundant due to the expiry of her fixed term contract.

Why we should care

It would be advisable for employers to consult employees on the selection criteria used in order to avoid arbitrary results, such as a pool of one, or if the selection criteria are otherwise likely to be controversial.    Where possible employers should rely on at least at least a few objective selection criteria to select employees to be at risk of redundancy. 

The EAT did not say that relying on a single selection criteria or an at risk pool of one employee will never be fair. However, when this is proposed employers should consult the employee on the criteria before it is applied.