In a redundancy situation, it is crucial that a fair procedure is followed. This includes offering the right to appeal to all employees selected for redundancy when they are issued with a dismissal notice. They should also be provided notice pay as stipulated in their contract and, if they have worked for the company for at least two years, redundancy pay.
Organisations must also consider alternatives to the redundancy, including if suitable alternative employment is available. This is where a new job is offered to the employee after they have been given notice of termination, but prior to their original job ending. This new job must begin immediately after the ending of the old job, or within four weeks of the termination date. A trial period can be implemented in order to ascertain their suitability for the new role.
The issue of when dismissal notice becomes effective was considered by the Supreme Court in the landmark case of Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood. Here, it was held that the claimant had not received notice of her redundancy until she had read it following her return from holiday. Crucially, this was not deemed to have been the date the letter was sent.
The claimant in this case worked as a teacher for the respondent. Under the ‘Burgundy book’, it was stipulated that all teachers be under a minimum of two months’ dismissal notice – three in the summer term – terminating at the end of a school term. This meant that their last days could either be 31 August, 31 December or 30 April in any given school year.
The claimant was later informed in writing that she was to be made redundant, with a termination date of 31 August, if no suitable alternative role was found for her. The process was later extended to mean her last day would be 31 December due to an Ofsted inspection. Despite being offered a trial period within an alterative role, she was informed that she had not met the requirements to be confirmed in the new job.
As a result of her potential redundancy, she had previously booked a two-week holiday abroad and, at this point, decided to still take her leave. A letter was distributed to her on day two of her absence which was sent to her home address and via email. This letter confirmed a redundancy dismissal with effect from 31 December. It also provided her the right to appeal, provided she responded in writing within a period of seven days. Crucially, this was sent just within the two-month limitation period.
On her return from her holiday, the claimant argued she had never received this notification. In line with the ‘Burgundy book’, she stated that she had therefore not been given the required notice and was entitled to notice pay up to the following 30 April.
In the first instance, the employment tribunal (ET) found that a genuine and proper redundancy procedure had been undertaken by the respondent, with its only failure being that she had not been allowed the chance to appeal.
The reasoning provided by the tribunal was that the respondent had taken reasonable effort to reach the claimant, such as sending a letter and email to her, and the fact that the claimant was reasonably aware she faced a redundancy situation as she had been unsuccessful in a potential new role. In this, the tribunal agreed with the respondent, who had argued that by the point the claimant had gone on holiday there was only one possible outcome to her situation; being provided her notice within the two-month time-frame for 31 December.
The tribunal also concluded that, even if the claimant had been granted the right to appeal, there was only a 10 per cent chance she would have been successful. The claimant appealed.
The EAT upheld her appeal, remitting the case back to a fresh tribunal for a reassessment of the facts.
They were quite critical of the tribunal’s judgement, outlining it was not possible to understand why the tribunal had reached the conclusions it did. Their biggest issue was the Haywood case. Although the claimant had relied on this ruling in her argument, the tribunal had not grappled with the legal issues that arose from it, nor how they could potentially impact upon this situation.
As both parties were entitled to know on what basis they have won or lost, and the tribunal had failed to demonstrate this, the appeal was allowed.
This is an ongoing case and it is currently unclear how a new tribunal will approach it. Nevertheless, like Haywood before it, this sends a clear warning to organisations over the distribution of notice letters. If a claimant can demonstrate they were unable to reasonably receive this notice, such as if they are on holiday, organisations may end up breaching contractual or even statutory notice requirements.
This case also highlights the importance of permitting employees to appeal against dismissal decisions. Here, the claimant should have been provided longer to respond to the letter, especially as she was out of the country and there was a reasonable chance she would not be able to do so.