Redundancy consultation: the importance of consulting early

When should redundancy consultation start? 

Where an employer’s decision on redundancy selection criteria automatically determines which employee will be dismissed, consultation must start before that decision is taken. 

Ms Mogane was one of two Band 6 nurses employed on fixed term contracts. She had been employed since 2016 on a series of one-year fixed term contracts and her current contract was nearing its end. The other nurse had been appointed on a two year fixed term contract and had recently successfully completed her probationary period. 

Due to financial pressures, the hospital needed to reduce the number of Band 6 nurses. It decided that Ms Mogane should be made redundant because her fixed term contract came up for renewal first. It did not consult with her about this decision. Although a redundancy consultation process followed, this was limited in scope and concentrated on trying to find alternative employment. When that failed, her employment was terminated by reason of redundancy. 

Ms Mogane claimed unfair dismissal. The employment tribunal dismissed her claim and ruled she had been fairly selected for redundancy. 

The importance of consultation 

The Employment Appeal Tribunal disagreed. It ruled that her dismissal was unfair. In coming to its decision, it reviewed key case law which emphasises the importance of consultation as part of a fair redundancy procedure. For a redundancy process to be fair, consultation must take place at a formative stage before decisions have been taken and where it is still possible to influence the outcome. Where, as here, the choice of selection criteria determined who was to be made redundant, consultation had to take place before that decision was made. This meant the employer should have consulted over its decision to select for redundancy based on whose fixed term contract came up for renewal first. 

The Employment Appeal Tribunal went on to say that the implied term of trust and confidence requires that employers do not act arbitrarily towards employees when selecting for redundancy. While a pool of one can be fair in appropriate circumstances, it should not be considered, without prior consultation, where there is more than one employee. 

What does this mean for employers? 

Consultation is a key component of a fair redundancy process. Employers should ensure that consultation take places at an early stage so that it can be meaningful and has the ability to influence the outcome. Where a choice of selection criteria means that there is only one person who can be dismissed, it will be necessary to consult before the decision on selection criteria is taken. 

Employers should ensure they have a rational basis for their choice of redundancy selection criteria. Otherwise, they risk breaching the implied term of trust and confidence and giving employees grounds to claim constructive dismissal. 

Mogane v Bradford Teaching Hospitals NHS Trust