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Redundancy Selection

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Is it fair for an employer making redundancies to decide on a pool of one employee without prior consultation?

No, held the EAT in Mogane v Bradford Teaching Hospitals NHS Foundation Trust.

The Claimant was one of several nurses employed on a succession of fixed-term contracts. The employer selected her post as ‘at risk’ for redundancy on the basis that her funding was coming to an end. The tribunal held that the dismissal was fair.

The EAT overturned the tribunal’s judgment, substituting a finding of unfair dismissal. Consultation should have taken place prior to the decision on a ‘pool of one’ being made, when the employee could still, potentially, have influenced the outcome. Whilst a pool of one can be fair in appropriate circumstances, it should not be considered without prior consultation, where there is more than one employee. Furthermore, the implied term of trust and confidence requires that employers will not act arbitrarily towards employees in the methods of selection for redundancy.

This judgment is likely to be controversial and might ultimately be found to be wrongly-decided. Whilst the EAT restated long-established principles about consultation (Williams v Compair Maxam), ruling out initial pools of one on principle would lead to employers artificially widening pools to cover staff not genuinely at risk, (e.g. a hotel considering making its in-house pianist redundant would on the face of this judgment be acting unfairly unless it widened the initial pool to non-pianist staff). It may prove hard to reconcile this judgment with the Court of Appeal’s decision in British Aerospace v Green, not cited in the judgment, and Waite LJ’s statement "the concept of fairness, when applied to the selection process for redundancy, is incapable of being expressed in absolute terms. There are no cut and dried formulae and no short cuts."

The reference to inadequate consultation founding a breach of trust and confidence might support constructive dismissal claims based on disputes around pools.

Thanks to Ed McFarlane for preparing this case summary.