The economic downturn has seen a marked increase in the number of cases before the Employment Appeals Tribunal (EAT). In 2011 there were some 8,500 claims before the EAT. Pre-recession the average number of claims was 3,500. Most of these relate to unfair dismissal claims. Within this a significant proportion are redundancy dismissals. As a consequence of this, the law on redundancy dismissal has developed and expanded significantly over the last few years.
The following are the key components in a redundancy dismissal:
The redundancy itself must be a genuine one and the person chosen must be fairly selected;
An employer must conduct itself reasonably in relation to any redundancy. There is no specific formula set down for what is required in terms of reasonableness. It is from this reasonableness requirement that the right to consult with employees and to consider alternatives to redundancies has been added. It is also from this open ended requirement of reasonableness that the EAT has imported in certain circumstances the right to appeal a redundancy decision. Whilst not a specific statutory requirement it falls within the band of reasonableness that an employer may have to consider.
The case law from the EAT concerning whether a right to an appeal from a redundancy decision should be offered is far from consistent in its development. The requirement to offer a right of appeal has arisen not only in cases where there has been a breach of an employer's own procedures but also as part of the requirement of the employer to act reasonably. In some instances it has formed part of the overall critique of the EAT of a particular employer in failing to act reasonably. In others it has been referred to in less mandatory terms by including in its checklist for effecting a fair redundancy that the employer "consider" offering a right of appeal.
Tips for employers:
This inconsistent approach makes it difficult to advise definitively what clients should do. To err on the side of caution, employers should consider where practical, offering a right of appeal from a redundancy decision. This may present practical difficulties in certain organisations particularly if it is a small business.
In light of the case law emerging from the EAT it should however be flagged. If not, an employer may find themselves in a situation of being penalised by the EAT for failing to afford the full panoply of rights within the realm of reasonableness expected of its conduct.