It is a well-known tenet of Employment Law, that having a genuine and meaningful consultation with affected staff, at a formative stage and prior to any dismissals taking effect, is a cornerstone of a fair redundancy process.

In the case of ADP RPO UK Ltd v De Bank Haycocks, the Court of Appeal found that, though there is no overarching legal presumption of “general workforce consultation” always being required in small-scale redundancies in non-unionised workplaces, employers should engage in meaningful consultation with affected staff at an early stage in the redundancy process, prior to any final decisions having been made and so that employees have a real chance to influence outcomes, in order for that process to be fair.

The adequacy of consultation has to be considered on a case-by-case basis, and in this case, it had been fair for an employer to assess and score employees at risk of redundancy before the consultation process began. However, that approach was not “best practice” and the finding that the redundancy process had been fair was largely down to the fact that employees had been given the right to appeal their selection for redundancy and had been able to challenge their scores at that stage of the process.

We take a closer look at the case, and its findings, below, and also explore key lessons for organisations to bear in mind when carrying out redundancy processes.

What were the facts in the ADP RPO UK Ltd v De Bank Haycocks Case?

Mr De Bank Haycocks (the Claimant) worked in recruitment for ADP RPO UK Ltd (the Respondent), recruiting staff for a single client. Following a 50% drop in the client’s hiring needs, due to the COVID-19 pandemic, ADP made the decision to reduce its recruitment team.

In mid-June 2020, Mr De Bank Haycocks’ manager was instructed to assess and rank the recruitment team’s members, using 17 subjective criteria provided by ADP’s US parent company. Mr De Bank Haycocks received the lowest score. On 18 June, ADP decided to make two members of the team redundant, including Mr De Bank Haycocks.

A redundancy process was then initiated, beginning with an initial consultation meeting on 30 June, followed by a 14-day consultation period. Mr De Bank Haycocks attended all scheduled consultation meetings. During these meetings he was informed of the redundancy situation and the reasons for it, as well as having the opportunity to ask questions and suggest alternative approaches. Though Mr De Bank Haycocks was told that selection would be by way of matrix, and was given an example template, at no stage was he informed of the scoring outcomes for himself or his colleagues.

During a third and final meeting on 14 July, Mr De Bank Haycocks was dismissed by reason of redundancy. He appealed, on the basis that he believed that his score had been too low and there had been procedural unfairness. By the time of the appeal hearing on 10 August, Mr De Bank Haycocks had been given a copy of his redundancy selection scores. Ultimately, however, his appeal was unsuccessful, on the basis that the selection process had been thorough and fairly applied.

Mr De Bank Haycocks subsequently brought an Employment Tribunal (“Tribunal”) claim for unfair dismissal. He claimed that his dismissal had been for reasons other than redundancy, and that there had been unfairness in the selection process because of an alleged failure to give him the opportunity to challenge his scores.

What was the Employment Tribunal’s decision?

Mr De Bank Haycocks’ claim was dismissed. The Tribunal found that:

  • the selection pool and criteria adopted by ADP was appropriate and reasonable;
  • the appeal process was conducted conscientiously;
  • Mr De Bank Haycocks did not provide sufficient evidence to show that his score warranted a higher ranking within the selection process; and
  • the redundancy process had been fair.

Mr De Bank Haycocks appealed to the Employment Appeal Tribunal (“EAT”), contending that the redundancy process had been fundamentally flawed because the decision to dismiss had been made before the commencement of the consultation period (and he had not been informed of his scores until the appeal), and that the Tribunal had inadequately addressed and/or entirely overlooked these issues.

What was the Employment Appeal Tribunal’s decision?

The EAT upheld the appeal and replaced the Tribunal’s original decision with a finding of unfair dismissal.

The EAT held that there was a clear lack of genuine consultation during the formative stages of the redundancy process, during which employees should be able to meaningfully engage with the process and have the possibility of influencing the decision by proposing alternative approaches before it is decided. There was no valid justification for this – for example, there was no particular time pressure warranting a truncated process; the number of redundancies had only been determined after a significant proportion of the selection process had already taken place. This made the redundancy process unfair.

The EAT stated that “general workforce consultation” in small-scale (i.e. less than 20 employees) redundancy processes in non-unionised workforces should be treated as a requirement of good industrial relations practice, so that there was in effect a rebuttable presumption that a dismissal where there had been no such consultation would be unfair.

The employer appealed this decision to the Court of Appeal (“CoA”); in particular the latter finding.

What was the Court of Appeals’ decision?

The CoA reversed the EAT’s decision and held that the redundancy process was fair and reasonable.

The CoA found that:

  1. there is no overarching legal presumption of “general workforce consultation” being the usual standard in small-scale redundancies at non-unionised workplaces – the adequacy of consultation has to be considered on a case-by-case basis; and
  2. meaningful consultation with affected employees must take place during the formative stages of the process, before the proposals have been finalised and at a point at which the affected employees could realistically still influence the decision, in order for it to be fair.

In this particular case, though it had been bad practice to carry out the scoring exercise before the consultation started (and it would have been good practice to give employees at risk the opportunity to comment on the selection criteria to be used before the exercise was done), the failure to give Mr De Bank Haycocks that opportunity did not mean that the decision was irrevocable when it transpired that his score was the lowest. He had been given the opportunity to challenge his scores during the appeal process. The redundancy process was therefore fair overall.

The CoA restored the original Tribunal’s decision, that the redundancy process had been fair.

Mr De Bank Haycocks appealed to the Supreme Court, but was refused permission to appeal.

Key lessons for employers

We have set out below some key lessons from the ADP RPO UK Ltd v De Bank Haycocks case, that employers should bear in mind in relation to redundancy consultation processes:

  1. General workforce consultation, about redundancies of less than 20 employees in non-unionised workplaces, is not compulsory. However, employees who are at risk of redundancy should be consulted with at a formative stage of the process in order for it to be fair – see point 2 below.
  2. Consultation with affected staff must take place at a formative stage of the redundancy process, before any final decisions have been made, in order for that process to be fair. In the ADP RPO case, the CoA emphasised that consultation must occur at a formative stage of the redundancy process – i.e. a stage at which the employer’s proposals are still open to influence by staff who are at risk – in order for that process to be fair and reasonable. The key factor in this case which rendered the process fair, was that employees were given a genuine opportunity to challenge their selection scores before a final decision was made and their dismissals took effect.
  3. Relying on redundancy selection criteria and processes dictated by an international parent company will not necessarily align with good industrial relations practices for UK organisations. In the ADP RPO case, the selection criteria and process had been dictated by the employer’s US parent company, however this did not equate to good industrial relations practice in the UK. The CoA commented that it had been bad practice to carry out the scoring exercise before the consultation started; it would have been good practice to give employees at risk the opportunity to comment on the selection criteria to be used before the exercise was carried out. However, the fact that employees had been given the opportunity to comment on and challenge their scores at appeal stage, meant that the redundancy process had been fair overall. Giving affected staff this opportunity will be key to the fairness of any redundancy process.
  4. A thorough appeal process can remedy procedural flaws arising in the earlier stages of the redundancy process and ensure overall fairness. In the ADP RPO case, though it had not been best practice to score affected employees before the consultation process had commenced, this had been remedied by the fact that employees who had been selected for redundancy were given the opportunity to appeal against their selection for redundancy and, in particular, challenge their scores. The CoA felt that that appeal process was handled fairly and thoroughly, and that as a result the redundancy process had been fair overall.
  5. The adequacy and fairness of redundancy consultations and procedures will depend very much on the specific context of each case. What is considered good practice will vary depending on the type of employment, the workforce and the specific redundancy circumstances. The adequacy and fairness of any redundancy consultation and procedure will therefore have to be considered on a case-by-case basis. However, a key principle is that a reasonable employer should consult with employees before any final decisions are made, particularly in relation to selection criteria and scores, and seek to reduce the impact of redundancies, either by avoiding dismissals or limiting the number affected.

If your organisation needs further advice on any of the issues outlined in this article, please get in touch and our team of experienced Employment Lawyers would be happy to help.

The material in this article is provided for guidance and general information only and is not intended to constitute legal or other professional advice upon which you should rely. In particular, the information should not be used as a substitute for a full and proper consultation with a suitably qualified professional. Please do contact the Bates Wells team if you require further information.