432: Redundancy dismissal unfair due to lack of consultation at formative stage

In Joseph De Bank Haycocks v ADP RPO UK Ltd (ADP), the Employment Appeal Tribunal (EAT) held that a redundancy dismissal was unfair because of the lack of meaningful consultation at the formative stage of the process.

Following a reduction in demand due to the Covid-19 pandemic, ADP decided to reduce its workforce. Before any communications had taken place with staff, Mr De Bank Haycocks’ line manager was asked to assess and score her team members by reference to 17 subjective criteria provided by ADP’s US parent company. Mr De Bank Haycocks came last in her ranking. After the scoring exercise had been completed, ADP decided to make two employees redundant.

A timetable for the redundancy process was then set, with a consultation period of 14 days and three individual consultation meetings. In his final meeting, Mr De Bank Haycocks’ redundancy was confirmed. Although he was unaware at that point of how he or his colleagues had been scored against the selection criteria, he was given his scores prior to his appeal hearing against his dismissal. This appeal was unsuccessful, and he brought a claim for unfair dismissal.

The Employment Tribunal dismissed Mr De Bank Haycocks’ claim, finding that the appeal procedure and selection process had been fair overall. Mr De Bank Haycocks appealed to the EAT, arguing that the Tribunal had not considered the issue of consultation properly.

The EAT allowed his appeal. There had been a clear absence of meaningful consultation at the scoring stage of the process, with the result that there had been no opportunity for employees to avoid redundancy by proposing a different approach at a time when this could have influenced ADP’s decision. This was indicative of an unfair process, and the Tribunal had not provided an adequate explanation of why it had still found the dismissal fair overall. The EAT also held that although Mr De Bank Haycocks’ appeal against his dismissal had corrected some of the defects in consultation, it could not repair this lack of consultation at the formative stage. The EAT substituted a finding of unfair dismissal and remitted the case to the Employment Tribunal to determine compensation.

Having conducted a review of existing case law, the EAT also made some useful general observations. It noted that employers will tend to be acting within the band of reasonableness in redundancy situations where they follow what is considered to be good industrial relations practice. What amounts to good practice will depend on the nature of the employment, the workforce, and the specific circumstances of the redundancies. However, regardless of the number of redundancies, the purpose of consultation is always to avoid or limit dismissals and ameliorate the impact of redundancy. Consultation at a formative stage of proposals is therefore a vital element of good practice, involving adequate information, sufficient time in which to respond, and conscientious consideration of the response. Tribunals will view the redundancy process as a whole, so that any appeal may correct an earlier failing. The EAT also noted that the approach of employers who operate globally may not reflect good industrial relations in the UK. For example, in this case, it was not necessarily reasonable for the employer to use US selection criteria solely because it is an international organisation.

The role of a Tribunal is to review the reasonableness of the employer’s decision, not to substitute its own, and Tribunals will consider the overall redundancy process when assessing whether it was reasonable to dismiss. This case illustrates that if there is a failure to consult at a formative stage, a finding of unfair dismissal may only be avoided by restarting the redundancy process in order to consult properly.