The Employment Appeal Tribunal (EAT) recently handed down judgment in the case of Hendy Group Ltd v Kennedy [2024] which clearly emphasises that a fair redundancy process must include proactive consideration of suitable alternative employment. This element of a redundancy process can often be an afterthought for employers, but as this case illustrates, it should not be and to do so risks falling foul of fair process.
Background of the case
Mr Kennedy was a longstanding and senior employee at Hendy Group before his role was made redundant in 2020.
Mr Kennedy accepted that the redundancy situation was legitimate and that his role was selected fairly. However, he brought an unfair dismissal claim on the basis that Hendy had not done enough to support him with finding suitable alternative employment in order to avoid his redundancy. His claim centred on the following issues:
- Although Hendy did tell Mr Kennedy that he could apply for roles via its website during the redundancy consultation process, no particular roles were flagged and this was the extent of the assistance provided. Mr Kennedy was essentially treated in the same way as an external job applicant for the roles.
- Mr Kennedy’s notice of termination did not contain any information around the possibility of suitable alternative roles.
- To add to this, when Mr Kennedy applied for roles within Hendy, the hiring managers were not told that he was subject to redundancy.
- Furthermore, one senior manager actively discouraged Mr Kennedy from making further applications because they considered that he lacked motivation, which was clearly contrary to Mr Kennedy’s efforts to seek a new role at the company.
- Mr Kennedy’s efforts were further hampered by the fact that his Hendy email and intranet access were withdrawn early in his notice period.
In view of this, the Employment Tribunal found that Mr Kennedy had been unfairly dismissed in circumstances where Hendy had not proactively assisted him in finding suitable alternative employment at the company. It awarded Mr Kennedy just under £20,000.
Hendy appealed but the EAT upheld the Employment Tribunal’s decision on appeal.
Take aways for Employers
Although the duty to consider suitable alternative employment is not a new one, it is commonly overlooked by employers carrying out a redundancy process or employers do not provide much assistance to employees to help their search. This case provides a useful reminder of its importance; employers must be making a proactive effort to identify suitable alternative employment and support employees accordingly before dismissing an employee on the ground of redundancy. As this case demonstrates, failure to do so carries significant risk of the process being deemed unfair.
As such, we recommend that employers take the following measures to help discharge their duty in respect of suitable alternative employment when carrying out a redundancy exercise:
- Have a clear process in place for identifying and offering suitable alternative roles to impacted employees – and ensure that it can be evidenced.
- HR should actively facilitate impacted employees’ search for roles and not simply point them towards a jobs board, or similar. This is likely to involve informing hiring managers that an employee subject to redundancy is applying for a role.
- Make sure that impacted employees have access to vacancies (and consider extending systems access throughout the notice period, if applicable, to facilitate this).
- Do not apply subjective perceptions about an employee regarding redeployment and do not discount roles that may not be a perfect fit (e.g. where it might involve a reduction in pay).