Tuesday 10th April 2018
Redundancy is a potentially fair statutory reason for dismissing a worker, so long as the employer follows a fair procedure and considers all the circumstances of the dismissal.
Where a redundancy situation arises because the business no longer needs any employees, or as many employees, to do certain work, the employer may wish to retain a more senior, skilled or long-serving employee whose work has reduced and dismiss another employee who is not apparently redundant. This practice is called ‘bumping’. The more senior, skilled or long-serving employee of the two employees will be kept on and essentially move into a less senior position at the expense of the more junior employee who will be ‘bumped’ out of the business.
Previously, employers were under no obligation to consider ‘bumping’ unless the employee facing redundancy raised it. However, the EAT found in the case of Mirab v Mentor Graphics (UK) Ltd that if an employer fails, in a redundancy situation, to consider the ‘bumping’ of a more junior employee to make way for a more senior employee of their own initiative (without the employee in question raising the issue themselves), then the dismissal of that senior employee independent may be considered unfair.
Even though it may be natural to make a more senior, long-serving, more experienced individual redundant as part of a cost saving solution, this judgement means that employers potentially open themselves up to the risk of claims for unfair dismissal. Whilst this judgement does not create a hard and fast rule, employers should, as ‘best practice’, consider making a more junior person in the business redundant rather than a more senior one. This approach helps to ensure the fairness of the redundancy process, in line with the reasonableness test under s.98(4) of the ERA.