Background: 

The respondent was a subsidiary of a recruitment company based in the USA.  The claimant was part of a small team recruiting for a single client.  During the pandemic, the recruitment needs reduced and the respondent decided to reduce its workforce.   The parent company provided a process by which to score and select employees for retention.  The claimant was last and he was consulted a few weeks later explaining that he was welcome to suggest alternative approaches.   Two weeks later he was dismissed.  The claimant complained that the dismissal was procedurally unfair due to a lack of consultation and a subjective scoring process. 

Outcome: 

At first instance the Tribunal found that the claimant failed to show that he should have been ranked higher.   As a result, they found the procedure to be fair and reasonable.  

The claimant appealed to the EAT and the appeal was successful.   The first ground was the need for reasonableness where the EAT outlined that the consultation should generally take place at the formative stages of the redundancy situation.  This should give the employees an opportunity to provide input and be able to impact the decision.    The second issue was the relationship between subsidiary and parent company.  The EAT noting that there will be differing approaches between nations as to what constitutes good industrial relations.  In this case, the use of USA selection criteria may not reflect good industrial relations as would be expected in the UK.   The EAT held that there was a lack of reasonableness due to the absence of consultation at the formative stage.  Whilst the Tribunal could still hold that such a process was reasonable they would have to explain why it was reasonable bearing in mind the lack of consultation at that formative point.   The Tribunal, here, did not do so and there was no good reason for the lack of consultation at that point.  Accordingly, the appeal was allowed and case remitted for remedy. 

Practical Guidance for Employers: 

This case demonstrates the importance of ensuring reasonableness within the redundancy process.  The controlling hand of the US parent company in this case led to a lack of adherence to what would be normal in a UK redundancy scenario.   The lack of good reason for the failure to hold consultation at the formative process was fatal here leading to the claimant’s appeal being successful.       

The full case can be found here:
https://www.gov.uk/employment-appeal-tribunal-decisions/mr-joseph-de-bank-haycocks-v-adp-rpo-uk-ltd-2023-eat-129