Case update (2): Redundancy – (un)reasonable consultation

unfair-dismissal3-250Summary: Can a redundancy consultation which is highly “insensitive and perfunctory” be reasonable overall and enable a fair dismissal?

No, says the EAT in Thomas v BNP Paribas Real Estate Advisory and Property Management UK Ltd available here.

Facts: The employee, Mr Thomas, was first employed by the employer, BNP Paribas, in 1972. In 2004 he was appointed Director in the Property Management Division.

Following a strategic review, a number of employees were identified as being at risk of redundancy, including Mr Thomas. BNP Paribas decided that he should be in a pool of one rather than a selection pool. Mr Thomas was called into a meeting on 6 January 2014 when he was informed that he was at risk of redundancy. He was immediately put on paid leave (gardening leave) and told that he should not contact clients or colleagues.

A formal consultation meeting was held with Mr Thomas the following day, 7 January 2014. He was informed that he was entering a period of consultation, during which alternatives to redundancy would be considered. Mr Thomas raised the possibility of an alternative role working on a particular client account, but this role had already been filled.

A letter sent to Mr Thomas the following day addressed him by the wrong name, which was subsequently criticised by the Tribunal as ‘insensitive’. The final consultation meeting took place on 13 February 2014, at which he was informed that there was no alternative to redundancy. His appeal against the decision to dismiss him was rejected.

Mr Thomas brought Tribunal claims for unfair dismissal and age discrimination, claiming that the consultation process was a sham and that the motive for his dismissal was his age (59). The Tribunal held that the dismissal was genuinely by reason of redundancy and followed a consultation that fell within the range of reasonable responses, even though the process had been handled in a perfunctory manner with a lack of sensitivity. It rejected Mr Thomas’ claim for age discrimination.

The EAT upheld Mr Thomas’ appeal against the finding that his dismissal was fair, describing the Tribunal’s decision as ‘troubling’. The EAT was particularly concerned with the fact that Mr Thomas was addressed by the wrong name after over 40 years’ service.  Also, the Tribunal had been highly critical of the employer’s consultation process, describing it as perfunctory and insensitive, but then went on to find the consultation and the decision to dismiss as being within the range of reasonable responses, without providing sufficient reasoning for this finding. The case was remitted to be reheard by a different Tribunal.

Implications: This case demonstrates the importance of planning a redundancy process carefully, and of managing the process sensitively and with an eye to detail. In particular in respect of gardening leave, as well as being a litigation risk, it is, practically, difficult to bring employees back into work once they have been put on gardening leave for redundancy consultation. Employers should assess, on a case by case basis, whether it is necessary to put the employee on gardening leave from the beginning of consultation, and (where they decide it is) need to be able to explain their reasons for this.