When should consultation take place in a redundancy situation?
In Mrs S Mogane v Bradford Teaching Hospitals NHS Foundation Trust, the employment appeal tribunal (EAT) considered whether the employment tribunal (ET) had overlooked aspects of the consultation process in its deliberations.
Mrs Mogane, a band 6 nurse, along with another band 6 nurse, had been employed by the trust on fixed term contracts. Due to the financial circumstances of the department, the trust decided that there needed to be a reduction in staff.
The second nurse had been appointed for the first time on a two-year contract, which had been confirmed shortly before the redundancy process. Mrs Mogane had been employed since 2016 on a series of fixed-term contracts, the most recent of these was due to expire before the end of the other nurse’s fixed term.
Pool of one
The trust decided on a pool of one for redundancy selection, that is Mrs Mogane. The sole reason given by the trust was that Mrs Mogane’s contract was coming up for renewal. No alternative processes were considered for deciding who should be made redundant.
Mrs Mogane’s contract was extended to facilitate consultation and, once the decision was made that she would be made redundant from her job, the remainder of the process related to an attempt to find suitable alternative employment.
Mrs Mogane made a number of claims to the ET, including unfair dismissal.
Employment tribunal (ET) findings
The ET considered that:
"In situations where all relevant employees are on short-term contracts, it is within the band of reasonable responses to take a decision based upon which of those is due for renewal at the particular point where there are perceived to be economical difficulties and where there is a diminution in the requirement for employees at that band 6 level."
Therefore, the ET concluded that Mrs Mogane had not been unfairly dismissed.
Mrs Mogane appealed the ET’s decision, claiming that the ET had been wrong in its conclusions regarding consultation and the pool for selection.
No genuine consultation
Her counsel argued that there are principles in case law which demonstrate the importance of fair consultation. He contended that, in this case, there was no genuine consultation and that the ET had failed to consider the issue of consultation about the pool. He put forward the argument that it cannot be reasonable that the sole criterion for selection for redundancy is related to the date of the fixed-term contract ending.
When to consult
Counsel for the trust argued that the employee must be consulted but there is no principle requiring that they be consulted at every stage of the redundancy process and there is no indication that they ought to be consulted at the beginning of that process.
Employment appeal tribunal (EAT) findings
The EAT agreed with counsels for both parties that the question of when consultation should occur is key to the EAT’s decision.
Consultation needed at formative stage
The EAT considered decisions from a number of previous cases and concluded that the formative stage of a redundancy process is where consultation ought to take place because:
- That means that a consultation can be meaningful and genuine.
- For a process to be fair, consultation should occur at a stage when representations from an employee can be considered and have the potential to affect the outcome.
The EAT concluded that the decision on the selection pool, and as a consequence that Mrs Mogane should be dismissed, was completed long before any meetings took place about her selection or any consultations took place. Therefore, it considered that this resulted in an arbitrary choice, that is, a choice related solely to the question of the ending of the fixed term contract.
Effective dismissal before consultation
The EAT came to the conclusion that Mrs Mogane was, effectively, chosen to be the employee dismissed before any consultation took place and, therefore, the dismissal was unfair.
Summary and advice
Employers need to ensure consultation takes place at a stage where the employee, or employees, could influence or potentially affect the outcome.
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