Role call: the importance of suitable alternative employment in the redundancy process
The recently published Employment Appeal Tribunal’s (EAT’s) decision in Hendy Group Ltd v Kennedy [2024] delivers a firm reminder that employers cannot treat the requirement to consider suitable alternative employment during the redundancy consultation as a procedural hurdle to simply get over. Where suitable alternative employment is available, employers must do more than gesture towards it, they must actively facilitate it. A failure to do so risks rendering an otherwise fair redundancy process unfair.
Background
Mr Kennedy, a long-serving training manager at Hendy Group and former car sales executive with over 30 years’ experience, was placed at risk of redundancy when Hendy restructured during the pandemic. In the Employment Tribunal proceedings Mr Kennedy accepted both the legitimacy of the redundancy situation and the fairness of his selection. However, he brought a claim for unfair dismissal, arguing that Hendy had failed in its duty to take reasonable steps to explore alternative employment within the business. The Employment Tribunal agreed and the EAT upheld that decision on appeal.
Why the dismissal was unfair
Although numerous internal vacancies existed during Mr Kennedy’s notice period, nothing was done by Hendy in respect of consideration of alternative employment which left the EAT to find that the Employment Tribunal judge was open to find that the Hendy’s approach was one that “no reasonable employer would have adopted.” Notable failures included:
- Mr Kennedy was directed to search vacancies as an external candidate, with no preferential treatment.
- He lost access to Hendy’s intranet and email early in his notice period, impeding his ability to apply.
- HR failed to notify hiring managers that he was at risk of redundancy.
- His line manager offered no support outside his own department, and HR failed to step in.
- A senior manager discouraged further applications, citing doubts about Mr Kennedy’s motivation, despite his evident desire to remain employed.
Strikingly, an email from HR to Mr Kennedy stated that he would not be successful in any future sales role applications, despite his extensive sales background.
The Employment Tribunal concluded that Mr Kennedy had proactively sought redeployment, but Hendy had not met its corresponding obligation to assist. It found that, had Hendy acted fairly, Mr Kennedy would likely have secured another role. As a result, no Polkey reduction (a reduction applied in cases where even if the employer had followed a full and fair process the employee would have lost their job anyway) was applied, and full compensation was awarded. Hendy was ordered to pay Mr Kennedy £19,566.73.
Legal and practical takeaways
This decision reinforces key legal principles:
- 1. Alternative employment must be more than an afterthought.
A fair redundancy process includes a proactive effort to identify and support redeployment opportunities. The employer bears a positive obligation, mere signposting is not enough. - 2. Fair treatment is as important as fair selection.
Even where redundancy selection is procedurally sound, an employer can still fall foul of section 98(4) of the Employment Rights Act 1996 if it fails to engage meaningfully with alternatives to dismissal. - 3. Internal barriers must be removed.
Cutting off systems access, failing to inform hiring managers, or applying unexplained filters to applications undermine fairness and will be scrutinised. - 4. Judging ‘motivation’ is a risky business.
Employers should avoid relying on subjective perceptions of an employee’s intent when considering redeployment. Tribunals are rightly suspicious of internal narratives used to preclude opportunities. - 5. Documentation matters.
Employers should be able to evidence a systematic approach to identifying and offering alternative roles, particularly where multiple vacancies exist.
What employers should be doing
This judgment should prompt those dealing with redundancies to reflect not only on redundancy procedures but also on the practical mechanics of providing suitable alternative employment support. This is particularly important for larger employers where, like in this case, there is far more to manage and therefore potentially more that can go wrong.
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