Is there a right of appeal in redundancy cases?

The Employment Appeal Tribunal (“EAT”) in the case of Gwynedd Council v Barratt and another has considered whether a dismissal was unfair where the employees who had been dismissed by reason of redundancy were not given an opportunity to make representations or appeal the decision.

Background

This was a case brought by multiple claimants, who were all employed as teachers by Gwynedd Council (the Respondent). Following a reorganisation, which involved the closure of the school that the Claimants worked at, the Respondent began a redundancy consultation. The Respondent informed the Claimants that their continued employment at another school, in the same or substantially similar role, would be determined by an application/interview process and that unsuccessful candidates would be made redundant.

The Claimants applied for these positions but were unsuccessful and were given notice of termination of their employment on the grounds of redundancy. Through their trade union representative, the Claimants queried why they had not been given the right to make representations or to submit an appeal. The Respondent replied that the failure to offer this did not cause any disadvantage to the Claimants, as the appeal would not have made any difference to the outcome. The Claimants subsequently brought a claim to the Employment Tribunal for unfair dismissal.

The Law

Previous case law has suggested that a redundancy dismissal will not necessarily be rendered automatically unfair where the employee is not allowed to appeal the decision and that the test for a Tribunal to apply remains that of overall fairness under section 98(4) of the Employment Rights Act 1996 (ERA). However, it can be a factor which affects the fairness of the decision, depending on the particular facts of the case.

Decision

The Employment Tribunal held that the dismissals were unfair due to the failure to provide the Claimants with a right of appeal, the absence of a consultation and also because of the manner in which the Claimants had to “apply for their own jobs”. The Respondent appealed to the EAT.

The EAT dismissed the appeal. In agreeing with the Tribunal, the EAT held that the Tribunal had not erred in its approach to the question of fairness and had not treated the case law as laying down mandatory requirements to be applied in every case. The Tribunal had applied the test under S.98(4) ERA and had found on the facts of the case that the dismissals were unfair. The EAT also rejected an argument from the Respondent about a ‘100% Polkey deduction’, i.e. that the Claimants would have been dismissed in any event even if they had been offered an appeal, on the basis that the dismissals were not inevitable and that, had the usual procedural safeguards been implemented by the Respondent, this was likely to have affected the outcome.

Comment

This case will serve as a useful reminder to employers that although it is not essential, it can often be to their advantage to offer the right of appeal to employees who have been dismissed due to redundancy. This may be particularly relevant where there have been procedural defects which have been identified by employees during the redundancy process, as these could potentially be rectified on appeal, or if an employer simply wants peace of mind that this will prevent the lack of an appeal being raised as an issue further down the line by an employee.

It is also worth highlighting that the Respondent’s approach to the reorganisation in this case, i.e. by threatening to dismiss staff and making them apply for their own or similar jobs at another school, was criticised by the Tribunal. Importantly, it was also suggested by the Tribunal that the very act of the Claimants applying for their jobs demonstrated that either an identical or substantially similar job existed, or at least they were so similar they amounted to suitable alternative employment, something which an employer is obliged to consider during a redundancy situation. Therefore, employers should also take care and seek specialist advice when looking to implement a similar restructuring programme.