Employment Law Cases
Redundancy consultation and selection criteria
Mogane v Bradford Teaching Hospitals NHS Foundation Trust
An employer acted unfairly when it did not consult on redundancy selection criteria, where the sole selection criteria inevitably led to a redundancy pool of one.
Ms Mogane and another nurse who carried out similar roles were both employed on a series of fixed-terms contracts (FTCs). When the trust ran into financial difficulties, it decided to make Ms Mogane redundant based on the sole criterion that her FTC was due to expire first, effectively putting her in a selection pool of one. It then consulted with her regarding suitable alternative employment. When none was found, she was dismissed for redundancy. She brought an unfair dismissal complaint which was dismissed by a tribunal. She appealed.
The appeal was allowed.
For redundancy consultation to be genuine and meaningful it must take place at a stage when an employee can still, potentially, influence the outcome. Adopting one criterion which simultaneously decided the pool of employees (Ms Mogane) and which employee was to be dismissed (Ms Mogane), without any consultation before that decision was made, was unfair. The implied term of trust and confidence requires employers not to act arbitrarily towards employees in the way they are selected for redundancy. While a selection pool of one can be fair in certain circumstances, it should not be considered, without prior consultation, where there is more than one employee.
The expiry of a FTC is still a dismissal in law and therefore a fair reason and process is required for employees with over 2 years’ service to avoid a successful unfair dismissal claim. Non-renewal of a FTC on the grounds of cost (particularly where the contract has previously been renewed) can amount to a redundancy. Therefore this case is a useful reminder that as part of a fair redundancy process, consultation with affected employees is not only key but must take place before any final decisions about selection are made. Bear in mind also that selecting fixed-term employees for redundancy simply on the basis of their fixed-term status could amount to less favourable treatment under the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002, unless their selection can objectively be justified.
If the trust had simply considered both nurses together in a pool, or even started consultation with Ms Mogane on the basis that they were minded to treat her in a pool of one but wanted her views before they confirmed that, then they are unlikely to have lost the claim.
In a subsequent decision also concerning a pool of one and consultation (Teixeira v Zaika Restaurant Ltd), the EAT held that a tribunal mistakenly made a 100% Polkey reduction to a compensatory award on the basis that a redundancy dismissal was inevitable as a pool of one could have been applied to the employee. Reviewing the case law on consultation, including this case, the EAT commented that if a fair procedure would have taken some time, there would be some compensation to cover the period that the consultation would have taken, even if dismissal was inevitable. It was also possible that consultation might have led to some change in the pool or even the outcome.