Consultation must start early where a pool of one is inevitable

It’s a well understood principle that to avoid a redundancy dismissal being unfair, there must be genuine and meaningful consultation. Termination of employment must not be a foregone conclusion. But how to put that into practice, and how this principle impacts on the overall consultation timeline, can be difficult. The recent Employment Appeal Tribunal (EAT) decision in Mogane v. Bradford Teaching Hospitals provides some useful guidance on the caution employers should exercise when dealing with limited selection criteria and pools of one.

Background

The claimant was employed as a nurse by Bradford Teaching Hospital NHS Foundation Trust. Since starting in 2016, she had been engaged on a series of fixed term contracts, with the latest due to expire on 1 June 2019. Another nurse in the same band carrying out a similar role was also engaged on a fixed term contract but hers had a later end date.

A redundancy situation arose in early 2019 after staff reductions were considered to cut costs and the claimant was invited to a meeting where she was told about these financial difficulties. The Trust then decided that, because the claimant’s fixed term contract was due to expire first, she should be made redundant and dismissed. The expiry date of the claimant’s fixed term contract was therefore the sole criterion applied, placing her in a pool of one.

It was not until after this decision as to the basis for selection had been made that any kind of redundancy consultation process began. No suitable alternative role was identified for the claimant and she was subsequently made redundant.

Following her redundancy, the Employment Tribunal (ET) dismissed the claimant’s unfair dismissal claim. The claimant then appealed to the EAT which overturned the ET’s decision and ruled the dismissal to be unfair. In its judgment, the EAT provided useful clarification as to the proper sequence of events in these circumstances.

The EAT’s decision

The EAT’s decision in this case serves as a useful reminder of the importance of genuine consultation, something that applies equally to individual and collective redundancy situations.

Importance of meaningful consultation

The EAT emphasised the importance of consultation as part of a fair redundancy procedure, calling it a “fundamental aspect”. It ruled that, on these facts, the timing of consultation was overlooked by the ET. Because the choice of selection criteria (the fact that the claimant’s fixed term contract was up for renewal first) had the practical effect of selecting the claimant for dismissal, she had been chosen before any consultation had taken place. This was unfair.

The EAT considered that consultation could not be considered genuine and meaningful if it did not take place at a stage when the employee could still potentially influence the outcome of the process. This means that, where the choice of criteria effectively determines the pool and who is selected for redundancy, consultation should take place before that decision is made and before dismissal is effectively rendered unavoidable.

Pools of one

In this case, although there were two nurses in comparable roles, the selection criteria applied placed the claimant in a pool of one. On this, the EAT sounded a note of caution, finding that a pool of one will only be fair in appropriate circumstances and should generally not be considered without consultation where there is more than one employee.

Avoiding arbitrary choices

Another principle of fairness identified by the EAT was the obligation for employers not to act arbitrarily between employees when deciding the selection criteria. In this case, choosing the date when the fixed term contract expired as the sole criterion was considered by the EAT to be arbitrary and it was unreasonable to identify that criterion without consultation.

What does this mean in practice?

The process followed by the Trust might not reflect that of many larger scale redundancy processes, but there are nonetheless a number of lessons to be learnt from this case.

• Where there is more than one employee in a comparable role, employers should ensure that pools of one are not decided upon without prior consultation.
• In order to be genuine, consultation needs to take place early enough to have a chance of influencing the outcome. In cases where the choice of selection criteria results in a pool of one – effectively ear-marking that employee for dismissal – consultation needs to start before that choice is made.
• Although an ET will be slow to interfere with employers’ decisions as to pooling and selection criteria, arbitrary choices in a redundancy process risk breaching the implied term of trust and confidence. Employers should therefore ensure that the rationale for selection criteria can be articulated and explained. The risk is minimised by a thorough and meaningful consultation process.
• Remember that selecting an employee for redundancy because they are on a fixed term contract could amount to less favourable treatment on the basis of fixed-term status and would need to be objectively justified. Also, the non-renewal of a fixed term contract is treated in law as a dismissal. If the employee has at least two years’ service then they can complain of unfair dismissal, so the employer needs to follow a fair procedure just as if the employee concerned was engaged on a permanent basis.

Mogane v. Bradford Teaching Hospitals NHS Foundation Trust and others – judgment available here.