In this case, the Court of Appeal held that the Employment Appeal Tribunal (EAT) had been wrong to decide that employers must conduct general workforce consultation in order for an individual redundancy dismissal to be fair.
Facts
Mr Haycocks worked as a recruitment consultant for ADP Ltd, a UK subsidiary of a US company. Mr Haycocks was part of a team of 16, employed solely to recruit employees for one particular investment bank. When the bank’s requirement for recruitment services fell by around 50% as a result of the Coronavirus pandemic, ADP Ltd decided to reduce its workforce.
ADP Ltd used a standard matrix of selection criteria to assess the 16 employees. Each employee was scored between one and four against 17 criteria, with all scoring being carried out by a single manager. On completion of the scoring Mr Haycocks came last in the ranking. Scoring was completed at the start of June 2020 before the parent company decided how many employees would be made redundant and before any consultation took place.
It was decided that the team had to lose two roles. Mr Haycocks was invited to a meeting on 30 June at which he was told that there was a requirement for redundancies, and that he could ask questions and suggest alternative approaches. He was then invited to a further meeting on 8 July and at a final meeting on 14 July he was handed a letter of dismissal. In these meetings Mr Haycocks was unaware of what scores he had achieved and was not given the scores of other employees as a comparison. He appealed against the dismissal decision. An appeal meeting was held on 10 August, by which time Mr Haycocks had been given his score, but his appeal was unsuccessful. He brought a claim of unfair dismissal.
The employment tribunal rejected Mr Haycocks' claim. It accepted that he knew nothing about his scores until after his dismissal but concluded that the appeal process was carried out conscientiously. It found that Mr Haycocks had not demonstrated that his score should have been higher.
On appeal, the EAT (see our previous alert) considered that the reality of good industrial relations in the modern employment environment required there to be general workforce consultation at a formative stage, including in non-unionised workforces and in cases where statutory collective consultation was not triggered. In the absence of such general workforce consultation, redundancy dismissals were likely to be unfair. Since no such consultation had been undertaken in Mr Haycocks' case, and there was nothing in the judgment to indicate that there were good reasons for this, the EAT held that Mr Haycocks' dismissal was unfair. ADP Ltd appealed.
The Court of Appeal allowed ADP Ltd's appeal. The Court confirmed that it is good practice, in cases where statutory collective consultation is not triggered and there is no recognised trade union, for employees to be given the opportunity to express their views during individual consultation on any issue that may affect the risk or consequences of their dismissal, whether it is particular to them as an individual or common to the workforce as a whole. That said, the Court held that good industrial relations practice does not require an employer to conduct "general workforce consultation" in such cases and it should not be regarded as "the usual standard". The EAT was wrong to suggest that there is a rebuttable presumption that a dismissal where there has been no such workforce level consultation will be unfair.
As to the principle that consultation must take place when the proposals are at a formative stage, the Court held that this means at a stage where it can make a difference to outcomes, i.e. where the employee can realistically still influence the decision. Clearly, the later in the process consultation occurs, the greater the risk that the decision-maker will have closed their mind, but whether that is so in a particular case is for the tribunal to determine on the facts.
In the present case, it was bad practice for the scoring exercise to have been completed before consultation had started. However, the selection exercise would only have amounted to an effective decision to dismiss if ADP Ltd would not have been prepared to revisit it had Mr Haycocks raised concerns in the course of consultation. Indeed, the tribunal found that the internal appeal process had involved a conscientious investigation of Mr Haycocks' complaints about the scoring. Accordingly, viewed overall, the employment tribunal had been entitled to find that the dismissal was fair.
What this means for employers
The EAT's stipulation that good industrial relations practice in redundancy situations that did not involve collective consultation nonetheless required "general workforce consultation" at a formative stage was unexpected, and left employers facing the unwelcome choice between unsettling the workforce by consulting with all those at risk at an early stage or running the risk of a claim.
The Court of Appeal's decision will therefore come as a relief to employers, as it restores the well understood principle that what amounts to fair redundancy consultation will depend on the particular circumstances and tribunals will assess this on a case-by-case basis. However, as a general principle, consultation must take place at a formative stage when employees may still influence the outcome and it is good practice to cover issues that are common to the workforce (such as ways of avoiding/reducing redundancies, the choice of selection criteria, etc.) as well as those that are particular to individual employees.
Another point worth noting concerns the Court's comments on employment with an international dimension. The Court noted that the EAT's criticism of the US parent's influence on the redundancy process was based on a misunderstanding of the facts (while the US parent did have a little input into the choice of selection criteria, ADP Ltd had not in fact used a US selection matrix). However, the Court agreed with the EAT's general proposition that different standards of redundancy consultation may apply in different countries, and that employers should follow good industrial practice in Britain rather than any less demanding standard that may apply in the jurisdiction of the parent company.
