The Court of Appeal has held that general workforce consultation is not a prerequisite for fair dismissal in small-scale redundancies.
Legislation has long provided that collective consultation is required when an employer is proposing to dismiss 20 or more employees within a 90-day period. Below this threshold, individual consultation with affected employees is essential for a fair dismissal process. However, the Employment Appeal Tribunal’s (EAT) 2023 decision in Haycocks introduced a potential new requirement for “general workforce consultation”, suggesting that employers should consult broadly with the entire workforce at an early, formative stage, even in small-scale redundancies. This unexpected requirement raised questions about the scope of fair consultation in redundancy situations, which the Court of Appeal has now addressed.
Background
Mr Haycocks, a recruitment consultant at ADP, faced redundancy following a significant reduction in recruitment demand due to the COVID-19 pandemic. ADP undertook a scoring exercise to select those at risk of redundancy before consulting with those who scored lowest. ADP did not inform Mr Haycocks of his scores until his appeal against his dismissal. He brought a claim at the Employment Tribunal (ET), arguing that ADP’s lack of transparency in scoring and selection was unfair.
ET decision
The ET dismissed Mr Haycocks’ claim, concluding that there was no bias in his selection or error in his scores. The ET accepted that Mr Haycocks’ scores were shared during his appeal and that ADP’s appeal process was handled conscientiously. Mr Haycocks had failed to show that he had been unfairly marked and his score should have been higher, or that his colleagues’ scores should have been lower.
EAT decision
Mr Haycocks appealed, arguing that the consultation process was flawed and that ADP had already decided to make him redundant by the time it started to consult with him. The EAT allowed Mr Haycocks’ appeal, finding that there had been a clear absence of meaningful consultation by ADP at workforce level during the formative stage of the redundancy process. The EAT held that “general workforce consultation” at a formative stage was a requirement of good industrial relations practice. The EAT did not elaborate on what would be considered “general workforce consultation”.
The EAT acknowledged that a failure to carry out this general workforce consultation will not always lead to an unfair dismissal. However, employers would have to justify why this stage of consultation did not take place.
Court of Appeal decision
The Court of Appeal has now overturned the EAT’s decision, stating that the EAT was wrong to hold that general workforce consultation at a formative stage was a requirement of good industrial relations practice. If there is a gap in consultation requirements due to statutory collective consultation only applying to large-scale redundancies, it would be more appropriate for the government to address this in legislation or in Acas guidance.
Comment
The EAT’s decision on the need for “general workforce consultation” had come as a surprise to those in the world of HR and employment law. It also led to significant debate about what such consultation meant. The Court of Appeal’s ruling provides welcome clarity that general workforce consultation is not a prerequisite for a fair dismissal in small-scale redundancies. Employers should continue to focus on well-established principles of fair redundancy consultation when dealing with small-scale redundancies. Ensuring consultation with affected individuals begins at a formative stage remains a crucial aspect of a fair redundancy process.
