In the recent case of Mogane v Bradford Teaching Hospitals NHS Foundation Trust  UKEAT 139, the Employment Appeal Tribunal (EAT) found that the redundancy dismissal of a fixed term employee was unfair due to a lack of genuine consultation and the use of arbitrary selection criteria.
The Claimant, Ms Mogane, was employed as a Band 6 nurse by Bradford Teaching Hospital NHS Foundation Trust (the NHS Trust) on a series of fixed term contracts, with the latest of these due to expire on 1 June 2019. In early 2019, the research unit in which the Claimant worked was facing financial difficulties, and the NHS Trust decided to reduce the number of staff in order to cut costs. The research unit included another Band 6 nurse who carried out a similar role to the Claimant, and who was also engaged on a fixed term contract but with a later expiry date to that of the Claimant.
The NHS Trust decided that the Claimant’s role be selected for redundancy, solely on the basis that her fixed term contract was due to expire first. The NHS Trust did not consider pooling the Claimant with the other Band 6 nurse and no other selection criteria was applied. The NHS Trust did consult with the Claimant, but this was after she was placed in the selection pool of one and the consultation focused on finding alternative employment. The Claimant was offered a Band 5 nurse role, but she declined this on the basis that it was effectively a demotion and she did not have the particular qualifications required for that role. Her role was then made redundant and she was dismissed.
The Claimant brought a claim for unfair dismissal which was dismissed by the Employment Tribunal (ET) at first instance. The ET found that there was a legitimate redundancy situation and concluded that the selection process was reasonable and appropriate in the circumstances. The Claimant then appealed to the EATA.
The Claimant argued that there was no genuine or meaningful consultation, as the NHS Trust had not consulted with her before determining the selection criteria which placed her in a pool of one and had the practical effect of selecting her for dismissal. She also argued that sole criteria applied by the NHS Trust (the expiry date of her contract) was arbitrary and unreasonable.
The EAT overturned the ET’s decision and found the dismissal to be unfair. The EAT found that the NHS Trust had decided on the Claimant’s redundancy well before any consultation had taken place. Consultation must involve a genuine conversation between an employer and an employee at a formative stage in the redundancy process, such that the employee should be able to influence the outcome. Where the decision of the selection criteria has the practical result that the selection of the redundancy is made by that decision itself, the employee who is likely to be affected should be consulted on the selection criteria before any decision is made. Further, the selection criteria must be objective and fair (for example ability, attendance, performance ratings and/or length of service). The EAT found that it was not reasonable by the NHS Trust to adopt a single selection criteria which simultaneously decided both the pool of employees and the employee who is to be dismissed. This made any consultation on the issue of dismissal futile from the time that the decision was made. The lack of consultation at a stage when the employee had the potential to impact on the decision is indicative of an unfair process. The matter was therefore remitted to an employment tribunal to determine remedy.
This case serves as a useful reminder to employers of some of the fundamental principles of a fair redundancy:
- consultation is a fundamental aspect of a fair procedure and there must be genuine and meaningful consultation at an early stage, whether the redundancies are individual or collective;
- for a redundancy process to be fair, consultation should occur at a stage when what an employee advances at that consultation can be considered and has the potential to affect the outcome;
- consultation should include the business case for redundancy, the proposed timeline and the criteria for selecting “at risk” employees;
- in light of implied term of mutual trust and confidence in a contract, the criteria for selection of “at risk” employees must be objective and fair, and not arbitrary. The approach should be fair between employees and reduce, as much as possible, any hardship;
- a tribunal should not easily interfere with an employer’s decision as to the pool. However, a tribunal must consider, as part of the band of reasonable responses, whether there is a rational explanation for the pool and if it is a pool that a reasonable employer could adopt in all the circumstances;
- a selection pool of one will only be fair in appropriate circumstances, and where there is more than one employee is a comparable role, employees should ensure that pools of one are not decided upon without prior consultation;
- selection for redundancy must be made fairly in accordance with the determined criteria; and
- selection for redundancy and termination of employment must not be a foregone conclusion.