Can unguaranteed work constitute alternative employment in redundancy situations?

Before employers dismiss an employee by reason of redundancy, they have a responsibility to take reasonable steps to look for an alternative to redundancy and to consult employees about those alternatives.

In Aramark (UK) Ltd v. Fernandes, Mr Fernandes argued that, before being made redundant, he should have been added to Aramark’s list of additional workers. This pool of workers were supplementary to Aramark’s usual workforce and could be called upon as and when required in times of reduced capacity. The workers on this list were (by their nature) not employed by Aramark, nor were they guaranteed work. However, they had the prospect of ad hoc future paid work.

The tribunal agreed with Mr Fernandes and held that, by not consulting him about the pool of additional resource, Aramark’s dismissal of Mr Fernandes was unfair. However, on appeal, the Employment Appeal Tribunal (EAT) confirmed that the relevant question was whether Aramark had behaved reasonably in treating redundancy as a sufficient ground for dismissing Mr Fernandes. The EAT decision turned on the fact that if Mr Fernandes had been added to the list of additional resource, it would not have avoided his dismissal by reason of redundancy. He would not have been provided with a guarantee of alternative employment. It found, therefore, that Aramark’s failure to add Mr Fernandes to the pool of workers was not relevant for the purposes of determining fairness under Section 98(4) Employment Rights Act.

Employers are reminded that it is well established by case law that the dismissal of an employee for redundancy may be unfair if the employer fails to make a reasonable search for suitable alternative employment. However, employers can be reassured by further case law which confirms that this duty is not to make every possible effort to look for alternative employment, but simply to make reasonable efforts.

If you have any questions on any of the issues arising from this post, please do get in touch with the People, Reward and Mobility team at Dentons for assistance.