The recent case of Hendry Group v Kennedy provided a helpful warning for employers considering making staff redundant to get the process right. In this case, even though it was accepted that there was a genuine redundancy situation and that Mr Kennedy was fairly selected from the pool, the employer failed in their obligation to fully consider alternatives to making Mr Kennedy redundant. Mr Kennedy was awarded almost £20,000.
The case
Mr Kennedy was employed by a car dealership to provide training to the sales teams across the workforce from 2015. He previously had 30 years’ experience in the motor trade, specifically in sales for new and used vehicles. In 2020, the employer underwent a restructuring on the back of the covid lockdown. There was a genuine redundancy situation and it was agreed that Mr Kennedy’s selection for redundancy was fair. The issues however arose when the company failed to reasonably make an effort to consider alternatives to making Mr Kennedy redundant.
The company invited Mr Kennedy to apply for available posts as they appeared on the intranet. This however was the same basis as any other applicant, which included both internal and external candidates. The judge held this was not sufficient to comply with the employer’s obligation to look at opportunities for alternative roles and to offer him any.
During his 7 week notice period Mr Kennedy applied for a number of sales roles however, despite interviewing well, he was unsuccessful because the hiring managers questioned his motive for applying and his drive to lead a team. It was felt that given the opportunity he would prefer to train people, and was only applying for these roles to avoid being made redundant even though Mr Kennedy had accepted that he would have to change his role if he was going to remain employed with the company. Mr Kennedy was eventually told by HR that he would not be successful for any sales related jobs, despite his experience, and during this period the company hired a number of external candidates for these roles.
Take aways
There are a number of points that any employer can take away from the judge’s views in this case, specifically on their duty to consider alternatives to redundancy. One of the leading employment law textbooks quoted in the judgment states that:
“in order to act fairly in a redundancy situation, an employer is obliged to look for alternative work and satisfy itself that it is not available before dismissing for redundancy”
It is helpful to bear this in mind generally. The tribunal went further and stated:
“That there might…. in every case have a been a better candidate when the vacancy was advertised to the world does not mean that the role was not suitable for Mr Kennedy. If it was suitable the Respondent had an obligation to consider Mr Kennedy for it, not appoint someone new to the business instead”
The judge took a dim view of the fact that the company employed external candidates into a role that Mr Kennedy could have done, contrary to the principles around redundancies. It was held that no reasonable employer would have offered such little support or acted in this way. It is a timely reminder that employers should act reasonably when dismissing any employee. As a point of reference, the Employment Appeal Tribunal suggested that a reasonable employer might consider doing the following, which is clearly not exhaustive:
- Speaking to the employee to assess where their interest might lie;
- Assist in identifying other alternative roles;
- Encouraging conversations about different roles;
- Consider if any training might assist.
Other considerations
The judge found that, based on Mr Kennedy’s experience and the fact he had had success when managing a distributorship for a brand that was previously unknown to him, if a reasonable process had been followed then he would not have been made redundant. Because of this, the argument that often restricts an employer’s liability in redundancy cases, particularly when the redundancy selection is accepted to be fair, was not applied. It is worth remembering when considering whether alternative employment is suitable or not, that an employer has an obligation to consider roles that the employee could do with a reasonable amount of training.
Conclusion
The Hendry Group v Kennedy case is a cautionary tale for employers who may underestimate the importance of process in redundancy situations, particularly around vacancies which it may have. Externally advertising roles when a redundancy process is underway is generally to be avoided, unless there is no one Even when the business reasons are sound, a flawed procedure can lead to costly tribunal claims and reputational damage. A failure to fully consider alternatives is just one pitfall that an employer could fall into when carrying out a redundancy process. For employers concerned about how to avoid these issues, our Employment team is here to help. Please contact a member of the employment team on 03330 430350.
