Business rationale key to fair reorganisation

If you are thinking about reorganising your business, preparation is key.

The Employment Appeal Tribunal (EAT) recently highlighted the need to consider both the business rationale and any impact on the specific rights of your employees as early as possible. 

Background

The Claimant was employed as a Financial Accountant, working from home (WFH) for 40 days per year.  It was agreed that her hours would be reviewed in due course.

While she was on maternity leave, a new, full-time role was created that encompassed her duties. During the recruitment process, the Claimant was informed that her role was at risk of redundancy and invited to apply for the new role. She was also provided with a draft settlement agreement.

The new role was advertised externally, and an offer was made to an external candidate. The Claimant felt that her redundancy was a sham designed to get rid of her because of her maternity leave.  She was subsequently dismissed.

The Claimant brought a discrimination claim.  

Employment Tribunal

Dismissing her claim, the Employment Tribunal (ET) found there was an acceptable business reason for the reorganisation and, as such, that the redundancy was not a sham. It rejected her automatic unfair dismissal claim, finding that the new role was not a suitable alternative vacancy, being full-time and office-based, with a focus on business analysis rather than financial accounting,

Employment Appeal Tribunal

The EAT found that the ET had failed to consider whether the employer’s need for employees to conduct financial accounting work had ceased or diminished. 

The Claimant’s role was still relatively new, and there had been a debate about how many working hours it required.

The need to perform additional tasks did not necessarily mean that her role was no longer required. The ET had not adequately scrutinised this question. If the role were not redundant, this would support the sham argument.  

Comment

If you, as an employer, are reorganising or restructuring your working practices, consider whether a redundancy situation may arise. Has your requirement ceased or diminished? 

Preparation is key. This will help you to determine your options, follow the correct legal process, and respond effectively to your employees.   

In a redundancy situation, where an employee has notified you of:

(a)      pregnancy,

(b)      is on maternity leave or

(c)      has returned to work and is within 18 months of either the expected week of childbirth or the notified date of birth, where the employee has notified the employer of the actual date of birth,

they have a priority right to a suitable alternative vacancy, where one is available. Similar rights also apply to adoption and shared parental leave.  You should consider the suitability of any alternative vacancy before offering it to anyone else. 

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