The issue in this case was whether fair consultation requires general workforce consultation, even if statutory collective consultation requirements do not apply (as in this case where fewer than 20 employees were implicated in the redundancy). The Employment Appeal Tribunal (EAT) suggested that fair consultation does require general workforce consultation, but the Court of Appeal (CoA) overturned that decision.

Mr De Bank Haycocks, a recruiter at ADP RPO UK Ltd, was made redundant in July 2020 following a decline in recruitment demand due to the COVID-19 pandemic. His manager assessed and scored the team using redundancy selection criteria before the consultation process began, leading to his selection for redundancy. After being informed of his dismissal, Mr De Bank Haycocks appealed, arguing that his scores were too low, and that the redundancy process lacked proper consultation. His appeal was rejected, and he brough a claim for unfair dismissal.

The Employment Tribunal (ET) found that the redundancy process was fair. They stated that ADP had investigated his concerns, and that the claimant had failed to prove that his scores were unjust. However, the EAT overturned this decision, ruling that the dismissal was unfair due to the absence of meaningful consultation at an early stage. The EAT also said that workforce consultation should have taken place before the selection process, rather than just individual consultation afterward.

ADP challenged this ruling, and the CoA ultimately allowed the appeal, reinstating the ET’s original decision. They found that there was no requirement for general workforce consultation in relation to redundancy situations concerning less than 20 employees.

While this decision will come as a relief to employers, this case should also highlight the importance of considering the ‘workforce level’ type questions during individual consultation with employees, such as why the business has decided to make the redundancies, in addition to any questions raised about their personal circumstances.

The case also reminds us as HR practitioners that:

1. redundancy consultation should start at a ‘formative’ stage where employers have an open mind and where employees still have a reasonable expectation of influencing the outcome; and
2. appeals are a key part of any redundancy process. In an appeal it is best to look at the redundancy process in the whole. Appeals may cure procedural problems in any redundancy process carried out.

In this case the EAT considered whether an employer’s behaviour during pre-termination negotiations as part of a redundancy process was “improper” under section 111A(4) of the ERA 1996.

Mr Gallagher brought a claim for unfair dismissal after being made redundant. To support his claim, he sought to rely on the employer’s actions during a meeting before his dismissal. The ET found that the conversation with Mr Gallagher during his redundancy consultation was a valid pre-termination negotiation under section 111A of the ERA 1996 and was therefore inadmissible.

Mr Gallagher appealed the decision, arguing that his employer had put undue pressure on him to accept the settlement offer. In his appeal he sought to rely on the following improper behaviour:

1. that he was told a redundancy process would begin if he did not accept the offer;
2. that he was misled as to the purpose of the meeting; and
3. that he was given only 48 hours to respond to the settlement offer.

The EAT dismissed the claimant’s appeal on all three grounds, ruling that the pre-termination negotiations were properly precluded from disclose in Tribunal and that there was no improper behaviour during the discussions. They found that the meeting was conducted calmly, that Mr Gallagher had the opportunity to seek advice, and the 48-hour deadline was not unreasonable.

The EAT said that an oral request to Mr Gallagher to reply in 48 hours as to whether he wanted to take the exit offer put to him was reasonable. Oral requests were not in writing and Mr Gallagher would still have the required 10 days to consider the settlement agreement package from when he received the settlement agreement.

The EAT also said that although it may not have been fair to change a meeting with Mr Gallagher from an absence meeting to a protected conversation without him knowing, this was not improper. The test as to whether the contents of a protected conversation could be disclosed in Tribunal was not fairness but impropriety.

The claimant in this case, Mr Norman, was a senior construction consultant for Lidl and had worked for the company for 22 years. In 2023, he was placed at risk of redundancy, competing for a single remaining role against two younger colleagues in their 30s. The claimant was 63 years of age.

An initial consultation meeting was held in which the claimant was told their score and put at risk of redundancy. After they learned that they scored one less mark for “knowledge” than their colleague, they were told this was because the colleague had a degree relevant to their work and had knowledge and experience of key areas. The claimant was dismissed by reason of redundancy.

The ET found that by including whether the candidates had a degree in the selection criteria, Lidl disproportionately disadvantaged Mr Norman, as those in their 30s were much more likely to have a degree than those in their 60s. As such, this scoring exercise placed the claimant at a disadvantage due to his age and it was found that the requirement for a degree constituted indirect age discrimination.

Employers must take care to ensure their selection criteria is balanced. As was highlighted by the ET, the requirement to have a degree was just a way for the business to highlight the importance of having relevant skills. Lidl had enough evidence of performance over the employees’ work history to properly select one of the three for redundancy without the need to include having a degree as a selection criteria. Had Lidl removed the need for a degree from their selection criteria, this case could have had a very different outcome.

Ms Osborn, who worked as a technical manager at Mothercare, was made redundant after returning from maternity leave following a restructuring process which had already begun during her leave.

Before going on maternity leave in 2020, Ms Osborn spoke to her manager about finding cover for her role but was told that cover would not be required. Despite this, while on leave, consultants were brought in to fill her position. During this time, many of Ms Osborn’s responsibilities were reassigned but she was not consulted about any these changes.

Upon her return to work, Ms Osborn was informed that her role was at risk of redundancy. She was encouraged to apply for a newly created role that very closely resembled her old role, but refused as she said the whole thing was a “sham” and was discriminatory. Ms Osborn was made redundant, and she brought a claim of unfavourable treatment because of maternity leave under s.18 of the Equality Act 2010. Shortly after her redundancy, the role was advertised and the consultant who had covered for Ms Osborn on maternity leave was selected for the role. It transpired that Ms Osborn’s manager, who had led the need to restructure Ms Osborn’s team, had worked before with the consultant who got the new role when they both worked for another company.

The ET was very quick to find that the claimant had been unfairly dismissed, and they declared the redundancy a “sham”. The Judge found it to be inconceivable that the Tribunal had not received any emails or written documents which explained why Mothercare made the decision to make the claimant redundant. The redundancy was deemed not genuine, and the claimant had been treated unfavourably because of her maternity leave.

For employers, this case highlights:

1. the importance of keeping documentary evidence which clearly sets out the decision-making process in relation to redundancies, to rebut any challenge made by employees or the tribunal; and
2. the need to challenge the decision-making processes of staff responsible for redundancies to ensure that they are not biased.

Currently, if an employer is proposing to dismiss 20 or more employees within a 90-day period “at one establishment” then the collective consultation obligations will apply. If employers don’t comply, employees can claim a protective award of up to 90 days’ gross pay.

Under the Bill, it is proposed that collective consultation will be required if there are either 20 or more redundancies “at one establishment” or where “some other threshold test” is met. The new threshold test may be based on a percentage or number higher than 20, but this has not yet been confirmed and is subject to further consultation. The Bill also states that, in carrying out collective consultation, the employer does not need to consult all employee representatives together or try to reach the same agreement with all of the representatives.

The maximum protective award for failure to collectively consult is due to be increased from 90 to 180 days’ pay.

In July 2024, the Code of Practice on fire and rehire was introduced to regulate the practice of firing and rehiring, ensuring that it is only used as a last resort.

The Bill intends to restrict an employer’s ability to use fire and rehire to change an employee’s terms of employment. It intends to make any dismissal automatically unfair where the reason for dismissal is that the employee did not agree to the employer’s attempt to vary their terms of employment, or because they intended to employ another person on varied terms to carry out substantially the same role. Employers will only be able to defend such dismissals where they are acting in response to extreme financial difficulties affecting the ability to carry on their business as a going concern.

This sets a high bar for employers and is therefore likely to only apply in rare and limited cases. In the very narrow circumstances when fire and rehire is permitted, the Code of Practice will still apply, but is due to be updated.

The maximum protective award for failing to inform and consult on fire and rehire will be increased from 90 to 180 days’ pay. This is in addition to any separate unfair dismissal compensation that is likely to be payable.

When carrying out a redundancy consultation, an employee’s immigration status should not impact the process and is not relevant to the selection criteria. While cost-saving is often a factor in redundancy, employers should avoid considering sponsorship costs when making these decisions.

Employers who hold a sponsor licence have certain reporting obligations to the Home Office and it is important to be aware that when a sponsored worker is dismissed, the employer must notify the Home Office within 10 working days. Employers will need to provide the employee’s last known address, email and phone number.

For sponsored employees, their ability to stay in the UK is conditional on them maintaining employment. Therefore, once the employer reports the termination, the Home Office will cancel their visa and typically grant 60 days’ notice for them to find alternative employment. To minimise the impact on sponsored employees, employers could consider putting the employee on garden leave instead of making payment in lieu of notice to give the employee more time to find another job.

Each job role in the UK is assigned a Standard Occupation Code (SOC) by the Office of National Statistics. When sponsoring an employee, the employer selects the SOC code that applies to their role. This code is recorded on their Certificate of Sponsorship and visa, and the employee can only work under this specific code.

If a restructure changes an employee’s role so that it falls under a different SOC code, the employer must update the sponsorship accordingly and a new visa must be approved before the role can take effect. It is important to note that SOC codes are based on job duties, not job titles and therefore, if the restructure only affects an employee’s job title and not their responsibilities in the role, a sponsorship update is not required. However, if the role itself changes, the sponsorship must be adjusted to comply with visa regulations.

Employers found to be employing individuals without the right to work can face a civil penalty of up to £60,000 per illegal worker. To prevent this, employers must conduct Right to Work (RTW) checks in accordance with legal requirements.

In the case of a Transfer of Undertakings (TUPE), RTW checks carried out by the previous employer are deemed valid for the new employer. However, if the previous employer failed to conduct these checks properly, the new employer cannot rely on them.

Normally, RTW checks must be completed before an employee starts work. However, in a TUPE transfer, the new employer is granted a 60-day grace period to conduct their own RTW checks. If done correctly within this timeframe, the new employer will be fully protected from penalties.

Significant changes to your business must be reported to the Home Office within 20 working days of the change. Examples of these changes include:

• Changes to the company name, address or branch details.
• Structural changes, such as more branches or sites
• Mergers, takeovers or a shift in business operations
• Cessation of trading or entering into insolvency proceedings
• Changes in company size e.g., moving from a “large” to a “small” business, which may affect sponsorship fees.

Employers should remain proactive in tracking such developments to ensure compliance with sponsorship regulations.

Fundamentally, a sponsor licence is non-transferable and only applies to the company that obtained it. It cannot be transferred to a new business owner.

Employers have 20 working days to make their report and apply for a new licence, if needed.