In most sectors, as budgets are squeezed and costs are soaring, the prospect of redundancies is an all too real one. If that is the case in your organisation, then the judgement in this recent Employment Appeal Tribunal (EAT) case is worth checking. It makes some useful comments on the consultation process; when it should kick off and its purpose. It reiterates that a consultation process is more than a tick-box exercise and is a crucial component in a fair redundancy. 

Mrs Mogane, the claimant was a band six nurse in a research unit. She was employed on a series of one-year fixed-term contracts (FTCs). A Band six colleague was similarly employed on a FTC for two years. Crucial to the case was that Mrs Mogane’s FTC expired before her colleague’s fixed term. 

Due to financial pressures, the unit was forced to reduce its staff. Mrs Mogane was invited to a meeting on 21 March 2019 and told about measures to reduce the staff headcount. Shortly after that, it was decided that Mrs Mogane would be made redundant. The only selection criteria being that her contract expired first. Her contract was due to expire on 1 June 2019 but was extended to 1 September to 'facilitate consultation'. However, in the view of the tribunal the decision had already been made to make Mrs Mogane redundant before the consultation process started. The consultation which did take place was concerned with helping her search for alternative employment. No post was found, and Mrs Mogane was made redundant. 

The tribunal concluded that the decision to make Mrs Mogane fell within the band of reasonable responses despite the consultation period taking place after the dismissal decision had been made. It noted further that it was reasonable that the only selection criteria was the FTC expiry date. 

EAT Judgement

The EAT disagreed: The consultation must take place at the formative stage of a redundancy process so that it can be meaningful and genuine. It should occur at a stage when anything discussed at that consultation could be considered and crucially has the power to affect the outcome. The EAT considered that to say otherwise would put the consultation process within the strictures of a tick box exercise or a place to discuss alternative employment. Whilst the latter may form a part of the discussions held, it is not its sole purpose.

The EAT further addressed the thorny issue of pool size. It confirmed that whilst it is not for tribunals to interfere with the decision, the selection must still fall within the range of reasonable responses. A pool of one may fall within that range although not in this case and especially given the decision was made without consultation. In addition, the EAT noted that having only selection criteria based on the expiry of FTC was an arbitrary choice and hence outside of the reasonable range.

Points to note

• the consultation must take place at a 'formative' stage in the process – it must be at the stage where the outcome could be changed following the consultation discussions – it is not a tick-box exercise
• a selection pool of one is not necessarily unfair, but how was that decision made? If the selection criterion reduces the pool to one, has there been a consultation at a formative stage and how were any other comparable employees excluded from the pool? Was that decision within a range of reasonable responses?  
• the decision is applicable for both individual and collective consultation – the principle applies to both types of consultation. It must be at a formative stage
• selection criteria should be within the range of reasonable responses, but they must also avoid discrimination. Selecting employees on the grounds of their FTC status could be discriminatory under regulations protecting fixed-term employees, similarly, selecting employees based on their part-time status, unless the decision can be objectively justified. Consider other indirect discrimination issues – are there any selection criteria which will adversely affect groups with a protected characteristic?
• whilst it may seem an obvious cost reduction not to renew FTCs, be mindful of the following; a non-renewal of a FTC is still a dismissal and an employer must have a fair reason, and if the employee on a FTC has been employed for four years or more on successive FTCs then they are automatically deemed permanent employees with all the relevant rights and protections

For more redundancy information do read our ebriefing on common redundancy questions.