Innes Clark

An appeal against a decision to make an employee redundant appears in many, if not most, company redundancy procedures. While the ACAS Code of Practice on Disciplinary and Grievance Procedures requires an appeal, that code does not apply to redundancy dismissals. As such the rights and wrongs of the use of redundancy appeals are governed only by relevant case law. In the early 1990s, a case from the Northern Irish (NI) Court of Appeal held it will not normally render a redundancy dismissal unfair if there is no right of appeal. The logic behind this decision was that a less stringent approach is required by the employer in a redundancy dismissal case than a misconduct case.

While this was an NI case and therefore not directly applicable to tribunals on mainland Britain, in coming to their decision the Northern Irish court had taken into account the decisions in two earlier Scottish cases. The decision has also subsequently been reinforced by cases this side of the Irish Sea. This includes a case from the Employment Appeal Tribunal (EAT) in 2005 - Taskforce (Finishing & Handling) Limited v Love - where it was held that there was not any rule “that a dismissal for redundancy will automatically be regarded as unfair on account of the absence of an appeal procedure………it is just one of the many factors to be considered in determining fairness”. The EAT criticised the employment tribunal for not distinguishing between the standards of procedural fairness appropriate to a disciplinary dismissal and those appropriate to a redundancy dismissal. While at the time the statutory disciplinary and dismissal procedures were in force - arguably applying more stringent standards than are now in place - the right to an appeal was and remains an essential part of a disciplinary dismissal.

The matter has now been looked at again in Gwynedd Council v Shelley Barratt & Another. In this case the claimants had been dismissed for redundancy following the closure of the secondary school where they worked. The closure was part of a larger reorganisation which involved the claimant’s school and nine primary schools closing and being replaced by one new community school. The staffing of the new school was determined by competitive interview with unsuccessful staff being made redundant. Both claimants applied for what were essentially their own jobs but were unsuccessful. They were not given the opportunity to make representations or appeal the decision despite having a statutory right to do so.

In finding the dismissal unfair the employment tribunal stated that the absence of an appeal in a redundancy procedure would render a dismissal unfair except in “truly exceptional circumstances”. The tribunal, criticising the judgement in taskforce, was of the view that the right to an appeal had “virtually become second nature for all but the most cavalier employer”. However, it went on to clarify that it was not saying the absence of an appeal “would render every dismissal unfair”. In this case the lack of any effective consultation was also an issue, and the tribunal took the view that “it should have been foreseeable that affected employees might want to appeal or grieve against the procedures adopted”.

When the case got to the EAT although they were of the view that the tribunal in this case had been correct in concluding the lack of an appeal was unfair, they distanced themselves from the criticisms of the taskforce judgement, instead endorsing the position taken there that there was no rule that the absence of an appeal would render a redundancy dismissal unfair.

What is clear from these cases is that the lack of an opportunity to appeal will not automatically render a redundancy dismissal unfair - just as including an appeal wouldn’t automatically make a dismissal fair. So should employers proceed without such an appeal? The ACAS website recommends “You should set up an appeals process for employees who feel they have been unfairly selected. This can reduce the chances of someone making a claim against you to an employment tribunal.” However, (unlike the ACAS Code of Practice on Disciplinary and Grievance Procedures) this has no legal status.

There are, undoubtedly, certain practical difficulties in having an appeal process in a redundancy situation. Unlike in disciplinary proceedings, a successful redundancy appeal for one employee is likely to mean the end of employment for another who has previously been told they were no longer at risk. This can be difficult to manage. However difficult that may be, having an appeal does though give the employer the opportunity to rectify any issue internally rather than before an employment tribunal.

Should matters get to a tribunal (and employees and their representatives may be more inclined to proceed with a claim and hold out for a higher settlement if an appeal has not been allowed) an employer is unlikely to face cross examination on why an appeal was included in a redundancy procedure. In contrast, they will undoubtedly have to justify why it was not and it could be the straw that breaks the camel’s back when it comes to deciding fairness. While exclusion of an appeal may not automatically render a redundancy dismissal unfair, we are inclined to think the Employment Judge in Gwynedd had a point - it will be a brave employer who decides to proceed without one.

Innes Clark is a partner at Morton Fraser