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Single redundancy did not require wider workforce consultation
De Bank Haycocks v ADP RPO UK Ltd
The Court of Appeal holds that employers do not have to conduct general workforce consultation for an individual redundancy dismissal to be fair. It overturns the EAT decision which suggested that consulting employees individually is not sufficient, even if collective consultation obligations do not apply.
Background
Mr Haycocks worked for ADP, a subsidiary of a US company. He was one of a team of 16 people who recruited for one client, Goldman Sachs. When COVID-19 hit, demand for new staff fell sharply and at the end of May 2020, ADP decided to reduce headcount. Its UK manager was given a scoring matrix from the US parent company to be used for selection purposes. Each employee was scored 1 to 4 on each of 17 entirely subjective criteria, Mr Haycocks coming last in the rankings. Scoring took place at the beginning of June 2020 before the later decision on 18 June on how many employees would be made redundant. On 19 June 2020 ADP set a timetable for the redundancy process. The initial consultation meeting was to be held on 30 June 2020, to be followed by a consultation period of 14 days, with those leaving being informed at a meeting on 14 July. ADP called Mr Haycocks to a meeting on 30 June 2020 and he was told there was a requirement for redundancies. It was explained that the purpose of the meeting was to inform him of the situation. He was also told that he could ask questions and could suggest alternative approaches to the reduction in demand. Mr Haycocks was invited to a further meeting on 8 July 2020. A final meeting was held on 14 July 2020 where Mr Haycocks was handed a letter of dismissal. In these meetings he was unaware of what scores he had achieved and was not given the scores of the other 15 as a comparison. He appealed against the dismissal, arguing that he had been scored too low. He complained that the dismissal was procedurally unfair, with the criteria used being entirely subjective. He also complained he had not been given information about the scores so he could challenge the scoring. An appeal meeting was held on 10 August 2020. Although Mr Haycocks did have his scores by the time of the appeal meeting, he was never shown the comparative scores of his colleagues. He bought a claim of unfair dismissal.
Tribunal and EAT decisions
The tribunal accepted that the appeal had been handled conscientiously and dismissed his claim. He appealed to the EAT.
The EAT considered that it was good industrial relations practice for an employer to conduct ‘general workforce consultation’ about redundancies at a formative stage, even if collective redundancy consultation obligations didn’t apply. Without such consultation, subsequent redundancy dismissals were likely to be unfair. As ADP had not carried out any general consultation, Mr Haycocks’ dismissal was unfair.
ADP Ltd appealed to the Court of Appeal, challenging the EAT’s proposition that there was a requirement for general workplace consultation.
Court of Appeal decision
The appeal was allowed.
Fair redundancy consultation does not necessarily involve some form of group workforce consultation. Redundancy situations arise in a wide range of circumstances. Tribunals must assess whether an employer has carried out adequate consultation on a case-by-case basis, reflecting the underlying principles of what amounts to fair consultation.
The Court of Appeal made clear that where collective consultation isn’t required, there should still be discussion with individuals about matters that might impact the risk of dismissal or its consequences, whether peculiar to that person or affecting the whole workforce, though failure might not be fatal.
But that does not require ‘general workforce consultation’ where collective consultation wasn’t required but could be done on an individual basis. The EAT was wrong to require otherwise. There’s a fundamental difference in a unionised situation where one individual is mandated to represent others.
As to the timing of consultation, the Court of Appeal observed that it was well established that this must take place when the redundancy proposals are ‘at a formative stage’. This does not necessarily equate to ‘early consultation’ in a temporal sense: what matters is that the employer still has an open mind and that the employee can realistically still influence the decision, not how soon after the proposal was first formulated the consultation occurs.
The tribunal was entitled to find that ADP did not take a final decision about the redundancy until after Mr Haycocks’ appeal. Until that point, he had a chance to influence the outcome of the process. Although it is good practice to allow employees to comment on selection criteria before they are applied, and to give employees their scores once scoring has taken place, it did not follow that the consultation in this case was inadequate because that had not happened.
Comment
Common sense has been restored. If it had stood, the EAT decision would have created real practical problems for employers not least because having to consult with the entire workforce about one redundancy might cause concern throughout the workforce. General workforce consultation has not been required previously in situations where collective consultation obligations don’t apply and an obligation to consult with the workforce on all proposed redundancies is not mentioned in ACAS guidance. According to the Court of Appeal, any perceived gap in protection should be addressed by Parliament.
The government has, via the Employment Rights Bill, proposed various far-reaching reforms to the law on collective redundancies but is not making any statutory changes to requirements for individual redundancies.