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Facts:
The employee, Mr Kennedy, worked for Hendy Group Ltd, a car dealership, in a variety of roles. Including working as a full-time trainer until his redundancy in 2020. He had 30 years’ experience in the motor trade and specifically in sales; both in respect of new and used vehicles.
Mr Kennedy accepted there was a genuine redundancy situation (largely due to Covid); and he also accepted that he was fairly selected for redundancy. However, he complained the employer failed to take reasonable steps to seek alternative employment.
During the redundancy consultation process, Mr Kennedy was told that he could apply for roles on the company’s website. However, he was not provided with any other guidance or assistance from HR and no specific roles were suggested to him. His notice of termination made no reference to the possibility of help to find another role. Mr Kennedy’s laptop, including access to internal email and the company’s intranet, was removed early in his notice period; limiting his ability to find alternative employment.
Mr Kennedy applied for several sales roles during his notice period, but was given no support from HR or management in doing so. In fact, HR only communicated with him via an email account he couldn’t access. Also, the hiring managers were not informed that Mr Kennedy had been selected for redundancy and some of his applications were negatively impacted by his single unsuccessful interview.
Further, an email sent by HR stated that because Mr Kennedy hadn’t been successful in one interview (where his motivation was questioned), he would not be considered for any other sales roles within the group.
Mr Kennedy brought an unfair dismissal claim.
Tribunal decision
The Tribunal upheld Mr Kennedy’s claim for unfair dismissal. It agreed the employer had failed in its obligation to take reasonable steps to seek alternative employment to avoid the redundancy dismissal. He was awarded almost £20,000 compensation – his full financial losses. No Polkey reduction was made because, had the employer acted fairly, Mr Kennedy would have been likely to secure another job within the business.
The employer appealed to the EAT.
EAT decision
The EAT dismissed the appeal. It agreed with the Tribunal that there was no evidence the employer took the kind of steps a reasonable employer should take to find alternative employment for someone facing redundancy. While employers aren’t required to create jobs or guarantee alternative employment, they must act reasonably. Including, for example, identifying other suitable alternative roles, or by encouraging conversations about other roles, even those which are more junior and involve a demotion.
Further, an employer’s duty to seek alternative employment had to be assessed in light of its size and resources. In this case, the employer was a large organisation with substantial resources and had several suitable vacancies within a short period of time which Mr Kennedy could have been considered for.
Implications:
A fair redundancy dismissal requires proper consideration of alternative employment. Although the extent of this duty depends on the size and administrative resources of the employer, there are some basic standards which all employers should aim to meet. Including:
Other steps (particularly relevant to larger employers with bigger HR teams) include providing practical support with applications, re-training for different roles or providing temporary arrangements while searching for permanent alternatives.
This case also puts the spotlight on how not to act – withdrawing the employee’s access to the company email and intranet; emailing him on an account he could not access; and deciding he was unsuitable for sales roles (which he trained staff to do) – were clearly unhelpful to the employer’s defence.
Also, remember that the duty to seek alternative employment is ongoing throughout an employee’s notice period. So even if no suitable vacancies are available at the point the employee is given notice of redundancy, the employer should continue to take steps to explore alternatives.
Finally, make sure you keep good records of:
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