Redundancy Dismissal Found to Be Unfair Following Failure to Consult Employee on ‘Pool of One’

Quick Hits

• The employer had not engaged in “meaningful consultation” with the employee, rendering the dismissal “procedurally unfair.”
• A fair redundancy process requires that employers adhere to a thoughtful and well-documented pooling and consultation process, which includes clear communication with affected employees.

Background

Zubair Valimulla worked for Al-Khair Foundation as a masjid liaison officer (MLO) employed at the charity’s Bolton branch. Three other employees performed the same or similar roles across the United Kingdom, chiefly raising funds for the charity through local schools and mosques.

During the COVID-19 pandemic, donations to the charity dramatically declined, and all officers assigned to collecting revenues were placed on furlough—including Valimulla, who was placed at risk of redundancy in a pool of one. During the consultation process, Valimulla presented a business case, setting out options for retaining his role. Valimulla was not consulted on the appropriateness of the pool despite the fact no other employees carrying out the same duties as he had been placed at risk.

The charity ultimately dismissed Valimulla in October 2020 by reason of redundancy, and he subsequently filed a claim for unfair dismissal in the Employment Tribunal (ET).

Redundancy Dismissals

Redundancy is a potentially fair reason for dismissal in the United Kingdom. However, for a dismissal to be fair, a tribunal must be satisfied that the employer treated redundancy as a sufficient reason for dismissal under the circumstances of the case. Employers have discretion to make business decisions that may result in redundancies, but they are expected to act reasonably in doing so. Whether an employer has acted “reasonably” in a redundancy dismissal will be judged by the tribunal with reference to whether:

• meaningful consultation has been carried out—that is to say, the employees were consulted before the decisions were finalised and were able to have an impact on the result;
• the employer “genuinely applied [its] mind” to the redundancy process; and
• considering the size and resources of the employer, the actions were reasonable.

In considering the above, the tribunal is duty bound to scrutinise the employer’s redundancy process, including the way in which the employer pooled “at-risk” employees and the subsequent criteria used to select individuals for redundancy.

The Employment Tribunal’s Decision

The ET dismissed Valimulla’s claim, finding that his employer had carried out a process that was fair overall.

Valimulla appealed on a number of grounds, the most significant being that the ET had erred in law, as it did not address the issue of why he was not consulted on being in a pool of one.

The Employment Appeal Tribunal’s Decision

The EAT allowed Valimulla’s appeal, and it substituted its own finding that the he had been unfairly dismissed.

The EAT held that because Valimulla had expressly raised the issue in his claim that he had not been consulted on the pooling, the ET ought to have scrutinised the issue when reviewing the overall fairness of the procedure, but it did not do so.

As consultation must take place when it can make a difference, in this case, the EAT found that the Valimulla’s consultation ought to have begun before the pool for selection was decided.

The EAT held that “in view of the lack of any meaningful consultation regarding this key issue in this case, namely why [Valimulla] was placed in a pool of one, despite other staff performing the same role, albeit at different locations … there can be only one outcome, namely that the dismissal was procedurally unfair.” (Emphasis in the original.) The charity was ordered to pay more than £16,000 to compensate Valimulla for the unfair dismissal.

Key Takeaways

In redundancy unfair dismissal claims, the tribunal is required to view the overall process in each scenario to determine whether a fair process was followed. This is another case that demonstrates the importance of meaningful consultation early on in an individual redundancy situation.

Whilst the EAT’s decision does not necessarily mean that employees should be individually consulted on the selection criteria in every redundancy scenario (unlike a collective consultation exercise, where employee representatives must be consulted on the criteria), this is a reminder that employers may benefit from carefully considering why each pool of employees is suitable and justifiable in each redundancy process.

Carrying out a thoughtful and well-documented pooling and consultation process including clear communication with impacted employees may help demonstrate the efforts made to work toward a reasonable response that meets the needs of the business whilst being a fair procedure overall.

Ogletree Deakins’ London office and Global Reorganizations Practice Group will continue to monitor developments in the law and will provide updates on the Cross-Border, Global Reorganizations, and Reductions in Force blogs as additional information becomes available.

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