In two recent cases, the Employment Appeal Tribunal (EAT) has handed down further substantial awards in redundancy dismissal situations*. This evidences an emerging trend in the EAT towards penalising employers who fail to adhere to fair procedures in effecting a redundancy, notwithstanding the fact that there is a genuine redundancy scenario.

The facts of both cases are broadly similar and involve the same group of respondent companies. The companies identified the need to carry out a restructuring. Redundancies were to be implemented to achieve the necessary streamlining of operations within the companies.

Both claimants held managerial type roles, one being a regional manager and the other an area manager. They were made redundant as part of the restructuring. The EAT held that both were genuine redundancies, but that the respondents did not adopt fair procedures in effecting the redundancies.

In particular, the EAT was critical of the fact that the companies:

  • failed to consult or engage with the claimants prior to announcing the decision to restructure
  • failed to properly consult with the claimants on the procedures that it adopted
  • did not afford the claimants a reasonable opportunity to consider these procedures
  • did not inform the claimants of their right to appeal the decision.  

On foot of this, the EAT directed an award of €127,350 in first case and €87,000 in the second case.

Comment

There is significant emphasis in both decisions on the reasonableness of the conduct of the employer. One of the difficulties in the redundancy legislation is that there is no definition of fairness in relation to a redundancy dismissal. However, the unfair dismissals legislation enables the EAT consider the reasonableness or otherwise of the conduct of the employer.

This subjective provision allows the EAT adopt a wide approach to its interpretation of the reasonableness of the conduct of the employer. On foot of this, and in light of the above two decisions, employers need to carefully adhere to fair procedures in carrying out redundancies. At a minimum, they need to ensure that they engage with employees at an early opportunity, that they are kept appraised of timelines and afforded opportunities to consider proposals and submit other alternatives to the proposed redundancies. Whilst not required by law, it may also be appropriate in some circumstances to offer a right of appeal from the redundancy decision.