Factual and Procedural Background
This is an appeal from the decision of an Employment Tribunal sitting in London (Central) on 21 and 22 March 2002. The Tribunal's decision was entered in the register on 25 April 2002, with the Chairman being Judge Weiniger. The Tribunal added Company B as a second Respondent and dismissed Company A from the proceedings. The Tribunal unanimously decided that the Appellant was not unfairly dismissed.
The Appellant was employed on 1 January 1998 with Company A, which was acquired by Company B at the end of 1999, resulting in all employees, including the Appellant, becoming employees of Company B. Employment contracts, salary management, and other employment formalities were handled by Company B. The Tribunal determined Company B was the employer and added it as a party, dismissing Company A from the case, a decision not appealed.
The Appellant’s role involved managing and maintaining IT systems and services for the training business, overseeing 17 staff across 10 sites in the United Kingdom. The Appellant had been successful under Company A’s centralized management structure, but tensions arose following the acquisition and reorganization under Company B’s local management approach.
Due to a downturn in the IT services industry by 2001, Company B implemented redundancy programs, with the Appellant affected by the third program completed on 13 December 2001. Prior to redundancy, management meetings considered cost-saving measures, including restructuring local management reporting, which risked making the Appellant’s centrally located position redundant.
The Appellant was informed of the redundancy risk in a face-to-face meeting on 17 May 2001 and received a letter confirming the anticipated redundancy process, consultation opportunities, and potential outcomes. The consultation period ran from 17 May to 31 May 2001, during which the Appellant chose to go home but was able to contact management, including Mr McLeod and the Resources Director, Dr Harvey.
The Tribunal found that the Appellant had ample opportunity to engage in consultation but did not actively participate or raise concerns. On 31 May 2001, the Appellant was formally notified of redundancy and given appropriate payments. The Tribunal accepted that Company B had no suitable alternative employment for the Appellant and that the Appellant did not inquire about other positions or indicate willingness to accept subordinate roles during the consultation.
The Appellant was represented by Attorney Barnett, who argued there was no fair consultation and an inadequate search for alternative employment. The Tribunal rejected this argument, holding that the employer had taken reasonable steps and that the Appellant had failed to make clear any willingness to accept subordinate positions early enough to allow consideration.
A Preliminary Hearing identified two points of law in the Notice of Appeal, but the Appellant abandoned one ground related to precedent conflict. The remaining ground concerned whether the Tribunal erred in law by treating a proposition from precedent as an incontrovertible rule.
Legal Issues Presented
- Whether the Employment Tribunal erred in law by allegedly elevating a proposition from precedent into an incontrovertible rule of law regarding the employer’s duty to seek alternative employment for a redundant senior employee.
Arguments of the Parties
Appellant's Arguments
- The consultation process was unfair and inadequate.
- There was a complete failure by the employer to properly consider suitable alternative employment.
Respondent's Arguments
- The Employment Tribunal did not set a rigid rule but applied precedent reasoning appropriately to the facts.
- The employer took reasonable steps to find alternative employment within the group.
- The Appellant failed to indicate willingness to accept subordinate roles early enough to allow consideration.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Barratt Construction Ltd v Dalrymple [1984] IRLR 385 |
Employer's duty to take reasonable steps to find alternative employment; senior employees should indicate willingness to accept subordinate roles early. |
The Tribunal applied the principle that the employer is only required to take reasonable steps and that the employee must indicate willingness to accept subordinate roles to facilitate redeployment. |
| Abbotts and Standley v Wesson-Glynwed Steels Ltd [1982] IRLR 51 |
Related precedent on redundancy consultation and alternative employment. |
The Appellant abandoned the ground of appeal related to this case; the court affirmed no conflict with this precedent. |
| William v Compair Maxam Ltd [1982] IRLR 83 |
Guidance on fairness in redundancy consultation processes. |
The Tribunal used this case as a guideline to assess fairness in consultation, noting the absence of union involvement. |
| R N Hall v Times Furnishing Co Ltd (unreported, 22 January 1998) |
Consultation and redundancy procedure standards. |
The Tribunal considered this case but found its facts materially different and not helpful to the present decision. |
Court's Reasoning and Analysis
The Court began by identifying the relevant statutory framework under section 98(4) of the Employment Rights Act 1996, focusing on when a redundancy process might be unfair. The Employment Tribunal correctly applied established guidance, including from William v Compair Maxam Ltd, acknowledging these as guidelines rather than rigid rules, especially in the absence of union involvement.
The Court carefully examined paragraphs 70 and 71 of the Tribunal’s decision, which clarified that the employer’s duty is to take reasonable, not exhaustive, steps to find alternative employment. The Tribunal found that the Appellant did not make any effort to engage meaningfully in consultation or indicate willingness to accept subordinate roles until the hearing itself, which was too late to require the employer to consider such alternatives.
The Court rejected the Appellant’s contention that the Tribunal treated the Barratt precedent as an incontrovertible rule of law, instead finding that the Tribunal applied it appropriately as a factual and practical guideline within the context of the case. The Court also noted that higher-level employees are reasonably expected to be more proactive during consultation.
Finally, the Court found no legal error in the Tribunal’s conclusion that the employer’s redundancy procedure and consultation were fair and reasonable under the circumstances, and that no suitable alternative employment existed.
Holding and Implications
The appeal is dismissed.
The Court upheld the Employment Tribunal’s decision that the redundancy process was fair and that the employer took reasonable steps to find alternative employment. The Appellant’s failure to engage proactively in consultation and to indicate willingness to accept subordinate roles was a decisive factor. The decision directly affects the parties by affirming the dismissal as fair but does not establish new legal precedent beyond the application of existing principles.