White v HC-One Oval Ltd - Unfair dismissal: voluntary redundancy

The Employment Appeal Tribunal was called upon to assess whether or not an employee who volunteered for redundancy could pursue an unfair dismissal claim.

LAW

Section 94 Employment Rights Act 1996 (“ERA”).

(1)  An employee has the right not to be unfairly dismissed by his employer.

Section 98 ERA:

(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show— 

(a) the reason (or, if more than one, the principal reason) for the dismissal, and 

(b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held. 

(2) A reason falls within this subsection if it 

(c) is that the employee was redundant, or … 

(4) [Where] the employer has fulfilled the requirements of subsection (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer)— 

(a) depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and

(b) shall be determined in accordance with equity and the substantial merits of the case.

Section 139(1) ERA:

(1)  For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to— 

(2)  (b) the fact that the requirements of that business— 

(i)            for employees to carry out work of a particular kind, or 

(ii)           for employees to carry out work of a particular kind in the place where the employee was employed by the employer, have ceased or diminished or are expected to cease or diminish. 

FACTS 

The claimant works as a receptionist in a care home operated by the respondent. Due to staff shortages, she provided additional administrative support to the home but complained via a grievance in July 2018 when she did not receive an acting up allowance for doing this on top of her existing receptionist work. 

In June 2018, an additional receptionist was engaged at the home, and in September 2018 a redundancy consultation was opened within the receptionist pool. Following provisional selection for redundancy, the claimant asked for it voluntarily, which was agreed, and the employment came to an end by voluntary redundancy. The grievance was dismissed soon after without process. 

It was then argued by the claimant that the dismissal was unfair, as the redundancy process was a sham by reason of the new receptionist taken on just two months before the redundancy process was started. The claimant believed she had been targeted by this due to their part-time status and previous grievance. 

A claim was raised.

EMPLOYMENT TRIBUNAL (ET)

In defending the claim, the respondent argued that the claimant had asked for redundancy, and that was the reason she was dismissed. This, they argued, was reason enough to strike out the claim as it had no chance of succeeding. 

This argument was accepted by the ET, where it was said that: 

“A claim based on that dismissal [voluntary redundancy] would not succeed as the employer would satisfactorily establish the reason and reasonableness of the decision. The claimant wished to complain about the actions of her employer which broke the term of mutual trust and confidence prior to her volunteering for redundancy. She could have claimed constructive dismissal if she resigned in consequence of the breach. However, she did not…”

On that basis, the claim was struck out due to its fundamental flaw.  

The claimant appealed the decision. 

EMPLOYMENT APPEAL TRIBUNAL (EAT) 

It was made clear by the EAT that when an employee volunteers to be made redundant, they are agreeing to be dismissed as redundant. Therefore, it was not a resignation and the ability to bring an unfair dismissal claim was maintained. 

The ET’s decision amounted to an error of law, as it had not considered that the central facts of the case were disputed by the parties, as the respondent maintained that the claimant was offered an alternative role, and the redundancy was genuine, and this was disputed by the claimant. Due to this, a full hearing of the evidence was necessary to determine the facts before a decision could be made on the matter, as even where a valid reason for dismissal exists, the process must still be fair and reasonable.   

The EAT remitted the case back to the ET for a full hearing of the evidence.

Note for employers

This case clearly demonstrates the need for a fair process in redundancy, even where employees volunteer for it. As this is still a dismissal in law, there must be a genuine reason in place before any dismissal is confirmed, and a fair process, in which the participants are made aware of the situation and consulted on their options. 

There may be a temptation to move straight to dismissal once an employee volunteers, but in cases where the employee has over two years’ service, or there are outstanding issues, conducting a full consultation is still likely to be the best course of action to take.

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