Regular listeners of our podcast may remember our discussion in March this year of the Employment Appeal Tribunal’s decision in the case of Joseph De Bank Haycocks v ADP RPO Ltd.
One of the key aspects of the EAT’s decision was that it recommended that “general workforce consultation” be carried out as part of good industrial relations practice in the case of smaller-scale redundancies. This left employers facing the unpalatable prospect of consulting the wider workforce about proposed redundancies, before conducting individual consultation, with the potential of destabilising the workforce.
The case has since been appealed, and the Court of Appeal has recently handed down its judgment which will be welcome news for employers. In short, the Court of Appeal confirmed that general workforce consultation is not a prerequisite to a fair redundancy process.
Background
Collective consultation with trade unions or elected employee representatives is required where an employer proposes to dismiss 20 or more employees within a 90 day period. The purpose behind such consultation is to discuss issues that are common to the group of affected employees as a whole, most obviously to discuss ways in which redundancies can be avoided or the number of redundancies can be reduced and to discuss procedural issues relevant to the group as a whole, including the choice of selection criteria.
When collective consultation has been carried out, individual at risk employees will then be consulted with about issues relevant to them, including the potential (or not) of suitable alternative employment.
Collective consultation requirements do not apply where there’s a proposal to dismiss fewer than 20 employees. It has therefore been long understood that employers were able to consult with individually affected employees without the need for wider workforce consultation. However, the EAT’s judgment in Haycocks earlier this year cast doubt on that established practice, raising the possibility that such wider consultation was required, even for smaller scale redundancies.
The Court of Appeal’s judgment
The Court of Appeal was very clear that “general workforce consultation” is not appropriate for smaller scale redundancies. In particular, the court found it would not replicate the purpose of collective consultation, which is to consult with a body of representatives mandated by the workforce to raise issues on their behalf. Instead, the Court of Appeal held that wider workforce consultation at an early stage would result in individual employees simply expressing their own views. It was therefore appropriate for employers to consider the adequacy of consultation on a case-by-case basis. The Court of Appeal found that the EAT had appeared to attempt to fill what it perceived as a gap in the statutory requirements that collective consultation did not apply to smaller-scale redundancies. However, if such a gap exists, the court held that “it is more properly addressed by legislation or, perhaps, by ACAS guidance”.
Conclusion
This means that employers can take comfort in the knowledge that wider workforce consultation is not a pre-requisite to the good industrial relations needed to ensure a fair redundancy process. However, despite this, employers should ensure that they consider how much consultation is required in a redundancy process on a case-by-case basis.
One of the other aspects of this case was that the employer did not share the employee’s individual selection scores with him until he appealed his decision, meaning that he did not have the ability to comment on them or raise any queries until his redundancy was confirmed.
Employers should ensure that they provide employees with the selection criteria during the consultation process and that they are given an opportunity to comment on them. Once scoring has been undertaken, it is good practice to provide at risk employees with their own score against the selection criteria, together with the threshold score for being “safe” to enable employees the opportunity to raise any queries on the scoring, and to enable the employer to revisit the scoring if needed.
Rebecca Berry