Redundancy is one of the potentially fair reasons for dismissal listed in the Employment Rights Act 1996. Even in a genuine redundancy situation, employers still have to act reasonably under the general unfair dismissal provisions contained in section 98(4). A dismissed employee may complain, for example, that they have been unfairly selected for redundancy; that it was unreasonable for the employer to have dismissed them for redundancy where alternative work was available; or that the employer’s redundancy procedure was defective.
The ACAS Code of Conduct on Disciplinary and Grievance Procedures requires employers to take certain steps before dismissing an employee - including giving them the right to appeal against their dismissal. However, the Code doesn't apply to redundancy dismissals or those relating to the non-renewal of fixed-term contracts on their expiry.
In Gwynedd Council v Barratt and Hughes the Court of Appeal had to determine if two employees who were made redundant were unfairly dismissed because their employer did not allow them to appeal against their dismissal.
Hughes and Barratt were PE teachers in a school. Following a reorganisation, the school they worked in closed and a new one was opened. The school put all staff on notice that they may be dismissed due to redundancy and asked them to apply for positions in the new school. Hughes and Barratt were interviewed, but were unsuccessful and were made redundant.
They were not given an opportunity to appeal and raised this with their employers who apologised for the oversight, but said that it wouldn't have made any difference to the outcome because their 'dismissals were caused by the closure of the school and that no appeal panel would have been able to reverse the fact of closure and thus avoid dismissals'.
They issued claims and argued that they should have been given the opportunity to appeal against the decision not to appoint them and that this rendered their dismissals unfair.
ET and EAT decisions
The employment tribunal was extremely critical of the way in which the school had handled the reorganisation. It took the view that the school had circumvented the established way of dealing with redundancies (consultation, pooling, selection criteria and looking for suitable alternative employment) by putting staff on notice that their jobs were at risk and requiring them to apply for vacancies at the school that replaced the one it was closing.
'Threatening to dismiss staff and compelling them to apply for their own jobs or similar jobs ignores years of jurisprudence on dealing with potential redundancy situations. It abrogates the employer’s responsibilities and seeks to circumvent employment rights'.
The tribunal found that in these circumstances, the lack of any appeal or review of this process was both substantively and procedurally unfair and outside the band of reasonable responses available to a reasonable employer.
The school lost its appeal to the EAT and appealed to the Court of Appeal.
Court of Appeal's decision
The Court of Appeal said that there is no general rule that failing to allow someone to appeal against their selection for redundancy will mean that their dismissal is unfair. But, the absence of an appeal is one of the factors a tribunal will consider when determining fairness.
In this case, the tribunal had been entitled to consider all the relevant circumstances, which included a lack of consultation as well as the absence of an appeal.
This decision doesn't mean that you must always allow employees to appeal against their redundancy as a final stage in the process. If you have properly consulted about the redundancies (both collectively and individually) your staff will have already had the opportunity to challenge their selection and ask to be considered for alternative roles. And, in those circumstances, you may decide not to offer an appeal to avoid going over the same ground.
But, offering an employee the right to appeal against a redundancy dismissal will strengthen your case that a dismissal for redundancy was fair. And, it's also been held that where the employer does provide an appeal, the usual rule applies that a fair appeal can, if necessary, cure an unfair initial decision. That's why many employers err on the side of caution and offer appeals even where they have properly consulted individuals and given them the opportunity to challenge their selection at an earlier stage in the process.
One other point to note - you must also make sure that your redundancy process corresponds with any contractual right to appeal that the employee has. In this case the teachers had a statutory right to appeal against their dismissals which their employer also ignored.
Helen Dyke is a Senior Associate in the Employment Team at Irwin Mitchell