A recent Employment Appeal Tribunal (EAT) decision serves as an important reminder that employers must take active steps to help employees find alternative employment within their organisation during redundancy processes.
Background
In Hendy Group Ltd v. Kennedy, Mr Kennedy worked as a trainer in a well-known car dealership’s training academy. He was highly qualified, with more than 30 years of experience in the motor trade. Due in large part to the pandemic, a redundancy situation arose and the dealership ultimately dismissed Mr Kennedy on the grounds of redundancy. Mr Kennedy accepted there was a genuine redundancy and that he was fairly selected for it.
However, he claimed that he was unfairly dismissed, as the dealership had failed to consider the possibility of him continuing to work in a different role.
Employment Tribunal decision
The Employment Tribunal (ET) held that the dealership had failed to comply with its duty to seek suitable alternative employment for Mr Kennedy during the redundancy process. In contrast, Mr Kennedy did all that he could to find another role. The ET criticised the dealership for not referring to any possibility of help to find another role in the correspondence it sent Mr Kennedy to give him notice of dismissal and indeed not offering him any such help. Mr Kennedy had to return his laptop shortly after the dealership gave him notice, which meant he did not have access to internal email or the dealership’s intranet.
The ET noted that there were multiple jobs that were available for which Mr Kennedy would have been qualified and wanted, but the dealership actively blocked Mr Kennedy from securing a role. The dealership’s HR team informed Mr Kennedy that he would not be considered for a sales-related role, because the manager who interviewed him for his unsuccessful application for a sales role questioned his motivation in applying for such a role.
Tribunals will reduce an award of compensation to reflect the possibility the respondent would have still dismissed the claimant, even if it had followed a fair procedure. This is known as a “Polkey” deduction. In this case, the ET declined to make a Polkeydeduction because the dealership failed to attempt to avoid dismissal.
EAT decision
The dealership appealed, but the EAT dismissed its appeal. The EAT agreed that the dealership had done nothing to consider suitable alternative employment. It also upheld the ET’s decision not to make a Polkeydeduction to the compensation it awarded to Mr Kennedy, concluding that if the dealership had fulfilled its duty to seek alternative employment for him, Mr Kennedy would have secured another role.
Key takeaways
This case provides several important lessons for employers managing redundancy situations:
- Active assistance is required: Take proactive steps to help redundant employees find alternative employment within the organisation.
- Communication is crucial: Ensure affected employees can access all relevant information about alternative roles and that managers are aware of employees at risk.
- Skills assessment: Help employees identify transferable skills and suitable alternative roles.
- Document your efforts: Keep clear records of all attempts to find alternative employment for affected employees and decision-making processes if you conclude that there is no suitable alternative employment.
This case demonstrates that redundancy processes require more than just procedural compliance prior to giving redundant employees notice of dismissal. Employers must genuinely engage with
at-risk employees to help them secure alternative employment. Failure to do so could result in a finding of unfair dismissal and significant compensation awards.
