If an employer is considering making redundancies, as well as ensuring that the reason for the redundancy is fair, they need to follow a fair redundancy process before dismissing. An employee may have a legitimate claim for unfair dismissal, if they can show the process was flawed or incomplete.
An employer should begin the process by identifying an appropriate selection pool; this is the group of employees from which it will select those who are to be made redundant. The Employment Appeal Tribunal (EAT) considered the question of what should be on an employer’s mind when selecting a pool in the recent case of Valimulla v Al-Khair Foundation.
Facts of the case
Mr Valimulla worked as a Masjid Liaison Officer, involved in raising funds for the employer, a faith based charitable organisation. He was based in the North West of England and his role involved fundraising for the community. There were four other employees who performed the same or similar roles for the same employer in different locations nationally. Due to the Covid-19 pandemic, charitable donations were made less frequently in person at, for example, mosques and schools, and instead were made online. As a result, the charity proposed to close some of its regional branches and to make redundancies. For the purposes of redundancy selection, Mr Valimulla was placed in a pool of one and ultimately dismissed.
Mr Valimulla brought a claim for unfair dismissal. The original Employment Tribunal (ET) held that Mr Valimulla’s role was ‘unique’ and upheld the employer’s decision to dismiss him. Mr Valimulla appealed to the EAT.
The EAT’s judgment
The EAT concluded that the original ET had only gone as far as to establish that there was a genuine redundancy situation; but had failed to answer the necessary next question of whether the selection process was fair and whether the employer had put its mind to the selection process.
The ET was required to consider the fairness of the employer’s selection process which was to use a pooling system and to place Mr Valimulla in a pool of one. The ET should have considered whether “the employer genuinely applied their mind to the question of the pool from which employees should be selected and to determine whether the pool selected came within the range of reasonable approaches open to a reasonable employer.” This aspect of the case has been remitted to an ET for proper consideration of the similarities and differences between Mr Valimulla’s role and the role of the other liaison officers, to determine whether the choice of a pool of one was within the range if reasonable responses.
The EAT also found that no meaningful consultation had taken place because consultation did not begin until after the employer had made the key decision (to place Mr Valimulla in a pool of one). The EAT imparted the following guidance on effective consultation: “Meaningful consultation does not mean simply informing staff about a decision or proposal, giving them opportunity to make representations, and then putting into effect the proposal or decision which had, in truth, already been made. Meaningful consultation means setting out a provisional proposal, along with the rationale, and providing an opportunity for feedback, comments or observations.” Without meaningful consultation, the EAT held that Mr Valimulla’s dismissal was procedurally unfair.
Key takeaways for employers
Deciding on a selection pool is still within the employer’s discretion and, with a few limited exceptions, there are no hard and fast rules on how an employer should go about this. However, an employer should keep in mind that a tribunal will look at whether they have genuinely applied their mind to their choice of pool and whether their choice falls within the range of reasonable approaches open to a reasonable employer. This case is a reminder for employers when conducting a redundancy process to look closely at the similarities and differences between the roles of those employees potentially at risk of redundancy before making any proposals for pooling. Employers should also avoid making unilateral decisions about selection pools. For meaningful consultation, the employee should be given opportunity to comment on the employer’s proposals for selecting those for redundancy, including any proposals for selection pooling.
Azrah Ahmed