Employers must help redundant employees find alternative work

The Employment Appeal Tribunal (EAT) has upheld a ruling against Hendy Group Ltd. The Case, Hendy Group Ltd v Daniel Kennedy, highlights the importance of the obligation on employers to actively help redundant employees find alternative work.

Proactively assisting with alternative employment for redundant employees can help employers avoid costly unfair redundancy dismissal cases.

Case Background: Redundancy at Hendy Group

Daniel Kennedy had 30 years’ experience in the motor trade and had worked for Hendy Group Ltd, a car dealership chain, since 2013, latterly as a trainer in the Training Academy.

In 2020, a redundancy situation arose largely due to the COVID-19 pandemic and Mr Kennedy was selected for redundancy. Mr Kennedy accepted that a genuine redundancy situation had arisen with the team and that he was fairly selected.

However, he pursued a claim regarding how the process was handled, specifically that he was unfairly dismissed because Hendy Group failed to explore alternative employment opportunities.

Mr Kennedy’s claim was that Hendy Group failed to give adequate, appropriate or fair consideration to the possibility of him continuing to work for the company in a different role.

Tribunal Findings: Lack of Support from Hendy Group

The Employment Tribunal considered that the HR department had taken “no step whatever to assist him”. It took into consideration that rather than actively helping Mr Kennedy find alternative roles within the company, he was simply told by HR that he could apply for positions advertised on the company website. This in essence meant he was treated no differently to external candidates.

After he was required to return his laptop, he lost access to internal email and the intranet, meaning he then had only the same job access as the public, which made things more difficult for him. Equally, during his seven week notice period, multiple sales positions were available within the group but the company made no effort to actively consider him for these roles.

An email sent by HR also stated that because Mr Kennedy hadn’t been successful in one interview the response would be consistent for other sales related roles, effectively blocking him from future sales roles.

The Employment Tribunal concluded that Mr Kennedy was unfairly dismissed and found that Hendy Group failed in their fundamental duty to consider alternative employment for him.

Hendy Group was ordered to pay £19,566.73 in compensation with the tribunal finding that no “Polkey reduction” should be made (a reduction made to the compensatory award in an unfair dismissal claim to reflect the likelihood of the employee being dismissed even if the employer had followed a fair procedure).

Hendy Group appealed against the decision.

 EAT Outcome: Hendy Group’s Appeal Dismissed

The Employment Appeal Tribunal (EAT) dismissed Hendy Group’s appeal, upholding the Employment Tribunal’s decision. The EAT found that the Employment Tribunal did not make a mistake in concluding that Mr Kennedy’s dismissal for redundancy was unfair because the employer had failed to consider alternative employment.

The appeal also agreed that no Polkey reduction should be made and upheld the Judge’s conclusion that the reason Mr Kennedy did not get another job within Hendy Group was the employer’s failure to properly consider alternative employment and actively blocking his applications.

FInally, it was considered that if Mr Kennedy had not been unfairly blocked from applying for a job, he would have secured alternative work.

Key Takeaways for Employers

This case serves as a reminder that employers should consider the following when considering an employee for redundancy:

• Proactively assist employees find internal alternative employment with meaningful consideration. Simply directing an employee to a public job board is not sufficient. 
• Denying internal access to or failing to assess suitability for roles can constitute unfairness, risking costly unfair dismissal claims.
• Internal emails or informal comments that pre-judge an employee’s suitability without due process in the recruitment process for a given role may later be used as evidence of unfairness.

The fact that the EAT upheld the Employment Tribunal’s decision to award full compensation without reduction serves as a warning that the employer can bear the full financial consequences of the unfair dismissal where there have been procedural failings by the employer.

How Napthens Can Support

AfterAthena’s employment team supports clients by providing retained services with insurance for peace of mind, potentially saving huge costs for employers when tribunal claims occur. Get in touch or explore more.

For more information about this article or any other aspect of people services reimagined, download our App for Apple or Android, and contact your integrated HR, employment law and health & safety team at AfterAthena today.