Case update (1): Redundancy – Casual Work an Alternative to Dismissal?

Summary: Do employers need to offer employees casual work before a fair dismissal for redundancy?

Not unless it would avoid the redundancy, says the EAT in Aramark (UK) Ltd v Fernandes available here.

Background: Before employers dismiss an employee by reason of redundancy, they have a responsibility to take reasonable steps to identify opportunities for any alternative employment within the organisation.

Facts:  Mr Fernandes, the employee, was employed by Aramark, until he was dismissed for redundancy.  The employee argued that his dismissal was unfair because before being made redundant, he should have been added to the employer’s list of additional workers as it offered him at least a chance of some work. The list was used by the employer in the event of a labour shortage and those on it had a reasonable prospect of obtaining work on an ad hoc basis. However, they weren’t employed and there was no obligation on the employer to provide work.

Tribunal decision

The Tribunal agreed with the employee and held that, by not consulting him about the pool of additional resource, the employer had not taken reasonable steps to avoid redundancy and his dismissal was therefore unfair.

The employer appealed.

EAT decision

The EAT overturned the Tribunal’s decision. It found that the Tribunal had overlooked the relevant question which was whether, in the circumstances (including the size and administrative resources of the employer’s undertaking), the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee.

The EAT held that in this case the employee’s dismissal for redundancy would not have been avoided by placing him on the list. Being placed on the list opened the prospect of work but did not secure work. Therefore the employer had not acted unreasonably in treating the redundancy as sufficient reason to dismiss, as there was no other reasonable alternative.

Implications:  When dismissing employees by reason of redundancy, the redundancy may be unfair if the employer fails to make a reasonable search for suitable alternative employment to try to avoid the redundancy. However, this case helpfully illustrates that this obligation will not include placing the employee in question on ‘bank staff’ style list, where there is only the possibility of work, not a current and available vacancy.