In the case of Ashby v JJB Sports Plc UKEAT/0114/12 the EAT analysed whether a dismissal on grounds of redundancy can be fair where there has been a failure to consult. It held that a redundancy dismissal where there had been a failure to consult was fair, as consulting with the employee in this situation would have been "futile".

Background

The normal course of practice is that a redundancy dismissal will be unfair if there has been no consultation. Notwithstanding this position, Polkey v AE Dayton Services Ltd [1987] IRLR 503 recognised that in exceptional cases where consultation would prove "futile", failure to consult will not necessarily result in the dismissal being unfair. However, this defence is rarely used and there is little case law on this position.

Facts

Mr Ashby was employed by JJB Sports as an Associate Director. In 2010 a new Chief Executive was appointed and in order to deal with the financial difficulties JJB were experiencing, he sought to implement structural changes including key changes within HR. This involved creating an operating board which would include an HR Director and removing the role of Associate Director by dividing his duties amongst other employees. The role of HR Director was not advertised and an external candidate was appointed.

Mr Ashby was not aware of this re-structuring and was informed in a meeting that he was being dismissed by way of redundancy without any form of consultation. Mr Ashby asked if he could apply for the new role of HR Director but was told that it had already been appointed. Subsequently, Mr Ashby brought a claim for unfair dismissal arguing that there was no redundancy, and alternatively the dismissal was unfair due to the lack of consultation and that he had not been informed about the new role of HR Director.

Decision

The EAT upheld the tribunal's decision that the dismissal was fair and fell within the exception mentioned in Polkey when consultation would be "futile". The EAT held that this was far from being an ordinary case and that JJB were in a position where "highly sensitive commercial decisions" were required for the company's future and this included re-organisation. The EAT went as far as to say that "it was not unreasonable" for Mr Ashby not to be told of the company's plans. With regards to the question of the alternative vacancy, the EAT held that it was clear that the external candidate possessed more skills and had more experience than Mr Ashby. On this basis, it was reasonable for JJB to conclude that he was not suitable for the role.

Comment

It should be noted that whilst the EAT did hold that failure to consult in this case was not unfair, it did also make reference to the case of Poat v Holiday Inn Worldwide [1994] EAT 883/93 stating that a failure to consult will rarely be justified.

Employers should not assume that this case represents a fundamental change whereby consultation is not a fundamental requirement in the redundancy process. The decision should be treated with caution not merely because of the lack of clarity surrounding why the "futile" defence was applicable in this case, but also due to the lack of clarity as to why this situation was far from ordinary when it involved a re-structuring of senior positions. This decision falls into an exceptional category whereby due to the commercial sensitivity, the financial pressure on JJB and JJB's knowledge that Mr Ashby was not suitable for the alternative vacancy the need for consultation did not arise.