Introduction

The case of Hendy Banks City Print Ltd v. Fairbrother & Ors ([2004] UKEAT 0691_04_2112) presents a pivotal moment in employment law, particularly concerning the selection process for redundancy. This case was adjudicated by the United Kingdom Employment Appeal Tribunal on December 21, 2004, following an appeal against a decision by the Employment Tribunal in London Central. The core issue revolved around whether the employer had acted reasonably in selecting employees for redundancy, specifically whether the pool from which redundancies were selected was appropriate under the Employment Rights Act 1996.

Summary of the Judgment

The Employment Tribunal initially ruled unanimously that six applicants were unfairly dismissed contrary to section 98(4) of the Employment Rights Act 1996. These dismissals were scrutinized under the lens of redundancy procedures. The tribunal found that the employer, Hendy Banks City Print Ltd, had inappropriately limited the redundancy pool to only those employees trained to operate the Perfect Binding machine, despite these employees spending only one-third of their time on perfect binding tasks. The tribunal concluded that the selection pool should have included all members of the Finishing Department, who were multi-skilled and performed a broader range of tasks. The Employment Appeal Tribunal upheld the initial decision, dismissing the employer's appeal.

Analysis

Precedents Cited

The judgment extensively referenced established precedents to support its findings:

• Williams v Compair Maxam Ltd [1982] IRLR 83: This case articulated the principle that the tribunal must assess whether the dismissal falls within the range of reasonable responses an employer could adopt. It emphasized that selection criteria for redundancy should be objective and not solely based on the employer's discretion.
• Green v Fraser [1985] IRLR 55: Highlighted the "band of reasonableness," asserting that employers' actions in redundancy situations are only deemed unfair if they fall outside this band. It acknowledged that different reasonable employers might make different decisions in similar circumstances.
• Blatchfords v Berger and others EAT/207/00: Reinforced the principle that tribunals should not substitute their views for those of a reasonable employer when assessing the reasonableness of dismissal decisions.
• Post Office v Foley [2000] IRLR 827: Although pertaining to conduct-related dismissals, this case underscored that the reasonableness test applies universally, including in redundancy scenarios.

Legal Reasoning

The tribunal applied the "reasonable response" test, a legal principle that evaluates whether an employer's actions fall within the spectrum of reasonable behavior in redundancy situations. Central to this was the determination of the appropriate selection pool. The tribunal held that:

• The six applicants were the most experienced and multi-skilled members of the Finishing Department.
• Despite being trained for perfect binding, the applicants only dedicated about one-third of their time to this specific task.
• The remaining two-thirds of their time mirrored the work of other department members, making the restriction of the selection pool to only perfect binders unreasonable.
• The employer failed to invite volunteers for redundancy, which further undermined the fairness of the selection process.

The tribunal concluded that a proper redundancy exercise, which would have included all members of the Finishing Department, would have likely resulted in the retention of the six applicants.

Impact

This judgment reinforces the necessity for employers to adopt an inclusive and objective approach when selecting employees for redundancy. By affirming that selection pools should encompass all potentially affected employees and not be arbitrarily restricted, the case sets a precedent ensuring fair treatment in redundancy situations. Future cases will likely reference this judgment to argue against narrow or exclusionary selection criteria, emphasizing the importance of considering the broader context of employees' roles and contributions.

Complex Concepts Simplified

• Reasonable Response Test: A legal standard used to evaluate whether an employer's actions in a redundancy situation are fair and within the range of acceptable responses. It ensures that employers act reasonably and not capriciously when making redundancy decisions.
• Redundancy Pool: A group of employees selected as candidates for redundancy based on specific criteria. The fairness of the redundancy process partly depends on how this pool is determined.
• Unfair Dismissal: Termination of employment that does not follow a fair process or lacks a valid reason as defined by employment law. In this case, dismissals were deemed unfair due to improper selection processes.
• Employment Appeal Tribunal (EAT): A specialized tribunal in the UK that hears appeals from decisions made by Employment Tribunals, typically concerning points of law.

Conclusion

The Hendy Banks City Print Ltd v Fairbrother & Ors case underscores the critical importance of fair and reasonable procedures in redundancy situations. By affirming that the selection pool should be inclusive of all potentially affected employees based on objective criteria, the judgment reinforces the protections afforded to employees under the Employment Rights Act 1996. Employers are thus reminded to conduct thorough and unbiased redundancy exercises, ensuring that selections are based on comprehensive assessments of employees' roles, skills, and contributions. This decision not only provides clarity on the application of the reasonable response test but also serves as a vital reference point for future redundancy cases, promoting fairness and equity in employment practices.