The recent news of P&O Ferries’ mass dismissal of 800 employees has highlighted the importance of following the correct procedures and practice when it comes to employee redundancies (you can read more about that case here). In White v. HC-One Oval Ltd,the Employment Appeal Tribunal (EAT) has held that the employment tribunal was wrong to strike out a claim for unfair dismissal on the basis that it had no reasonable prospect of success because the Claimant had requested redundancy. This is an important reminder to employers that, even when an employee is made redundant as a matter of choice, it will not prevent them from bringing a valid claim for unfair dismissal.
HC-One Oval Ltd (HC-One), a care home operator, announced that it was reducing the number of employees carrying out reception and administration work in September 2018. The Claimant was provisionally selected for redundancy and, subsequently, requested voluntary redundancy. This was accepted by HC-One.
Following her termination, the Claimant submitted a claim for unfair dismissal. She alleged that:
- she had raised a grievance about having to cover the duties of an absent colleague as well as her own, without extra pay in July 2018;
- during the redundancy process, an administrative role had become available which should have been offered to her but was not; and
- the redundancy process had been engineered so that a receptionist recruited just before employees were placed at risk (and who had no childcare responsibilities) was offered a full-time role while the two part-time receptionists were dismissed.
The Claimant argued that the redundancy process was a sham and that she had been targeted for dismissal. This was disputed by HC-One who contended that (i) the dismissal was fair as the Claimant had volunteered for redundancy at her own request, and (ii) the claim should be struck out as it had no reasonable prospect of success.
The initial decision
The Employment Tribunal (ET) considered HC-One’s arguments at a preliminary hearing (ie without hearing any evidence from the parties). It held that, given the Claimant had volunteered for redundancy, she could not dispute the existence of a redundancy situation or HC-One’s decision to therefore dismiss her on grounds of redundancy. The ET therefore agreed that HC-One could show the reason for, and reasonableness of, her dismissal and struck out the claim on the basis that it could have no reasonable prospects of success.
The Claimant appealed to the EAT which found that the ET had erred in striking out the claim. The EAT said that the ET’s reasoning assumed that every voluntary redundancy situation would automatically be a fair dismissal, which the EAT found to be incorrect as a matter of law. Additionally, when considering a strike-out application, a Claimant’s allegations must be taken at their highest level. Therefore, the ET would not be able to determine whether the Claimant’s allegations were correct (and the redundancy was not genuine) without first hearing her evidence on this. Instead, the ET had mistakenly focused on HC-One’s decision to accept the Claimant’s request for redundancy, rather than the background leading to that outcome. The Claimant’s appeal was therefore upheld. The case has been remitted for consideration by a new judge and will therefore proceed to a full merits hearing.
It is becoming increasingly clear that employers are being subjected to higher levels of scrutiny when it comes to the way they undertake redundancy procedures. In cases of voluntary redundancy, it can often be forgotten that this still constitutes a dismissal for the purposes of employment law rights. The employer may therefore still be subject to an unfair dismissal complaint, in which the circumstances and process of the termination can be scrutinised (including, as here, whether or not the redundancy situation is genuine). It is therefore important that employers act properly and in accordance with their own internal procedures, in addition to ACAS guidance, regardless of whether or not a redundancy is voluntary, in order to avoid the risk of unfair dismissal complaints.