In this case, the EAT held that an employee's redundancy dismissal was unfair where the employer had not made a reasonable effort to identify or support alternative employment.
Facts
Hendy Group Ltd (HGL) is a large car dealership. Mr Kennedy, who had many years' experience in car sales, began working for HGL in 2013, initially as a salesperson for used cars. Between 2015 and his dismissal in November 2020, he was employed as a trainer in HGL's Training Academy, providing training for all of HGL's sales teams across its workforce.
In 2020, a redundancy situation arose, largely due to the Covid-19 pandemic. Mr Kennedy was selected for redundancy and, following a consultation process in September 2020, he was given notice of dismissal which would expire on 9 November 2020.
Mr Kennedy accepted that the redundancy situation was genuine, and that he had been fairly selected for redundancy. However, he brought a claim in the employment tribunal, alleging that his dismissal was unfair because HGL had not given adequate, appropriate or fair consideration to the possibility of alternative employment.
The tribunal upheld Mr Kennedy's claim. It noted that Mr Kennedy was told during a consultation meeting that he could apply for any roles that were listed as available on HGL's external website. He was not given any assistance to apply for any roles and none was suggested to him. HR did not inform any hiring managers that he was at risk of redundancy.
Mr Kennedy nonetheless applied for several available sales roles with HGL. He was interviewed for one role but was unsuccessful. The interviewers, Mr White and Mr Ball, found him to be personable, but were not convinced of his desire to lead and motivate a team, and wanted someone with recent car sales managerial experience. Mr Kennedy was not interviewed for any of the other roles for which he applied. For one of these, the recruiting manager decided not to interview Mr Kennedy because he was negatively influenced by feedback from Mr White.
On the final day of his employment, Mr Kennedy received an email from HR which had previously been sent to his work email address (to which he had not had access since late September 2020). That email informed Mr Kennedy that two of his applications for alternative roles had been rejected and, citing concerns about his motivations for applying for sales roles, confirmed that he would not be offered any other sales roles should he apply for them.
The employment tribunal concluded that HGL had failed to comply with its obligation to consider alternative employment. Mr Kennedy's dismissal was therefore procedurally unfair. Since HGL's failure was the very reason that Mr Kennedy did not obtain another job within the organisation, the tribunal decided not to make a Polkey reduction to his £19,566.73 compensation to reflect the possibility that he would have been dismissed in any event had a fair process been followed.
The EAT dismissed HGL's appeal. It acknowledged the tribunal's findings of fact about what HGL had done to consider alternative employment, and noted the absence of any evidence of other steps a reasonable employer might have taken – such as speaking to Mr Kennedy about where his interests might lie, assisting in identifying other roles, or encouraging conversations about other roles even if that meant demotion. On that basis, the tribunal had been entitled to find that HGL's approach to redeployment was one which no reasonable employer would have adopted.
The EAT did not consider that the tribunal had substituted its own view for that of the employer. The tribunal's findings about Mr Kennedy's career background and the feedback from his interview were relevant to the likelihood of him obtaining an alternative job. The tribunal was also entitled to be critical of the email of 9 November 2020, which appeared to evidence a decision by HGL that Mr Kennedy would not be accepted for any sales role at all.
On remedy, the EAT also upheld the tribunal's decision not to make a Polkey reduction. It accepted the tribunal's conclusion that, had HGL carried out its responsibility to consider alternative employment rather than unfairly blocking his applications, Mr Kennedy would likely have secured alternative employment within the organisation.
What does this mean for employers?
This case reminds employers of the importance of making reasonable efforts to seek alternative employment for employees at risk of redundancy. Merely telling employees that they can apply for available roles on the employer's website will not be sufficient, and making a blanket decision to reject all of an employee's applications for a particular type of role for which the employee has relevant experience, as the employer seems to have done in this case, would be a particularly risky approach. What is reasonable will depend on the employer's size and resources. However, as the EAT noted in its judgment, employers should typically consider taking steps such as speaking with employees about their interests, assisting in identifying other roles, and encouraging conversations about other roles even if they would involve demotion. Documenting such steps will provide valuable evidence to support the employer's defence in the event of an unfair dismissal claim.
