Court of Appeal rules on consultation process for individual redundancies

redundancy | consultation | fairness

In De Bank Haycocks v ADP RPO UK, the Court of Appeal restored the tribunal's decision that the redundancy dismissal was fair and held that "general workforce consultation" is not necessary where the collective consultation requirements do not apply.

Background

Mr De Bank Haycocks worked as a recruitment consultant for a UK subsidiary of a US company. He was part of a team of 16 people who recruited employees for a single client, Goldman Sachs.

In May 2020, the subsidiary decided that some redundancies would be necessary as Goldman Sachs' need for new employees had decreased because of the coronavirus pandemic.

The US parent company gave the subsidiary a standard redundancy selection matrix to assess the 16 team members across 17 criteria. The subsidiary performed this exercise around 10 June 2020. Mr De Bank Haycocks received the lowest overall score.

On 18 June 2020, the subsidiary determined it was necessary to make two roles in the team redundant. The subsidiary decided that a 14-day consultation would begin after it had informed all 16 employees individually that they were at risk of redundancy.

Mr De Bank Haycocks was informed in a meeting with the subsidiary on 30 June 2020. He was told that no formal decision would be made until the consultation process was complete and that "a selection scoring process will be used to determine who is selected for redundancy".

Mr De Bank Haycocks attended a second consultation meeting on 8 July 2020.

The subsidiary handed Mr De Bank Haycocks a letter of dismissal at the final meeting on 14 July 2020.

Mr De Bank Haycocks appealed the decision. He complained that:

• the selection criteria was entirely subjective;
• he had been scored too low; and
• he had not been able to challenge the scores as he had not been given any information about them.

The subsidiary dismissed the appeal and Mr De Bank Haycocks brought an unfair dismissal claim in the employment tribunal.

Employment tribunal decision

The tribunal dismissed the unfair dismissal claim after finding the redundancy process was fair.

The tribunal found no proof that the scoring process was flawed, and that any procedural shortcomings were addressed by the appeal process that had been carried out conscientiously.

Mr De Bank Haycocks appealed to the EAT.

EAT decision

The EAT disagreed with the tribunal.

In the EAT's view, collective consultation was good industrial relations practice in both unionised and non-unionised workplaces. The EAT said that that such consultation - better described as "general workforce consultation" - should generally occur at the formative stage of a process, regardless of whether the collective redundancy obligations apply.

The EAT found that there was a clear absence of general consultation at the formative stage in Mr De Bank Haycocks' case, and the appeal could not remedy this failing.

Having made these findings, the EAT allowed the appeal and held that Mr De Bank Haycocks' dismissal was unfair.

Court of Appeal decision

The Court of Appeal did not accept that general workforce consultation should be regarded as the "usual standard" in all redundancy situations.  

It appeared to the Court that the EAT's justification for requiring general workforce consultation was to remove the "dichotomy" between the treatment of redundancy situations where collective consultation was required and where it was not. However, the two situations were fundamentally different as, in collective consultation cases, the recognised trade union or appointed representatives express and discuss the views of the affected workforce. The Court said that that purpose is not replicated, even approximately, by holding a general workforce meeting where no one has a mandate to represent individual employees. 

The Court said that redundancy situations arise in an extraordinarily wide variety of circumstances and that the adequacy of the consultation has to be considered on a case-by-case basis. The Court acknowledged that group meetings may be useful in some small-scale redundancy situations, but it said their relevance will depend on the circumstances.

In the Court of Appeal's view, the EAT had sought to fill what it thought was an undesirable gap between the collective consultation requirements and those that apply to smaller-scale redundancies. The Court said that if such a gap does exist, it is more properly addressed by Parliament.

Having reached this conclusion, the Court moved on to consider when consultation should begin. The Court of Appeal said that consulting at a "formative stage" meant consulting at a stage where it can make a difference to the outcome. The Court noted that it will be harder for an employer to show that it had not closed its mind if consultation occurs at a late stage.

Turning to Mr De Bank Haycocks' case, the Court of Appeal accepted that it was bad practice for the subsidiary to carry out its scoring exercise before it began consulting and not to allow the employees an opportunity to comment on the selection criteria.

However, the Court said this did not mean that the "die was irrevocably cast" as the scoring could have been re-done if Mr De Bank Haycocks had been able to persuade the company that the criteria was flawed during the consultation process.

The Court said that Mr De Bank Haycocks had been provided with his scores at the appeal stage and there was no evidence that he had challenged the selection criteria or his scores at the hearing.

The Court of Appeal allowed the appeal and restored the tribunal's decision that his dismissal was fair.