The Court of Appeal has confirmed that the absence of any appeal does not of itself make a redundancy dismissal unfair, but that it is one of the many factors to be considered in determining fairness.
As we reported last year, Shelley Barratt and Ioan Hughes were both PE teachers at a community secondary school employed by Gwynedd Council. The Council announced the school (together with several other primary schools) would be closed and replaced with another school on the same site. All teachers at the original school were told that their contracts of employment would be terminated, but they were invited to apply to work at the new school. The large majority of teachers were successful, but these two employees were unsuccessful and were made redundant. They claimed in the employment tribunal that they had been unfairly dismissed.
The tribunal upheld their claims, and was very critical of the redundancy process. It held that the dismissals had been unfair because of the absence of consultation, the manner in which they were required to “apply for their own jobs”, and the failure to provide them with a right of appeal. Gwynedd Council unsuccessfully appealed to the EAT.
The Council then appealed to the Court of Appeal. It argued that the tribunal had wrongly applied a test of “truly exceptional circumstances” in determining the fairness of the lack of appeal, and that the tribunal should have followed a 2005 case in which the judge had stated that “it would be wrong to find that a dismissal on grounds of redundancy was unfair because of the failure to provide an employee with an appeal hearing”.
The Court of Appeal dismissed this appeal, considering that the 2005 case did not lay down a general principle. However, the Court of Appeal did agree that there is no general rule that, in redundancy cases, the absence of appeal or review procedure does not of itself make a dismissal unfair; it is just one of the many factors to be considered in determining fairness. It was clear in this case that the tribunal had considered the absence of an appeal in the context of other concerns about the redundancy process.
WHAT DOES THIS MEAN FOR EMPLOYERS?
This is useful confirmation that, in the absence of a contractual right of appeal, failing to offer a right of appeal will not invariably make a dismissal unfair. The safest course of action will generally to be offer an appeal, and many employers would prefer to have any opportunity to explore any issues internally on appeal, rather than in a tribunal.
Other useful points and reminders from this case are:
- Employers must usually give priority to employees at risk of redundancy over external candidates when seeking to fill available vacancies, provided that the vacancies constitute alternative employment.
- Where there are fewer vacancies than employees at risk, and the employer undertakes a selection process, that process will also be subject to scrutiny in unfair dismissal cases.
- Employers must consider redeployment in their “organisation”. In the private sector, an employer's "organisation" includes associated employers. Where the employer is a maintained school, as in this case, “organisation” will include other schools within the area of the same local education authority.
- As we reported previously, there are circumstances under which it will be fair to use competitive application procedures in redundancy situations instead of pooling employees and applying selection criteria. Where employees are being considered for changed roles, it might be appropriate to use a “forward-looking” competitive selection process (for example, an interview process). However, where employees are effectively being asked to apply for their old roles, the use of a competitive process is likely to be a factor pointing towards an unfair dismissal.