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Do employers have to offer redundancy appeals?

Tuesday, April 7, 2015

A recent decision of the EAT is of particular concern to employers undergoing redundancy procedures.


It potentially gives the EAT’s imprimatur to an additional test of fairness in redundancies which has not been generally considered necessary to date.


The facts of the decision in Maguire – v – Sleedagh Farms were not particularly controversial.  The employer implemented a redundancy procedure and the employee was dismissed.  The employee brought an unfair dismissals claim arguing that the redundancy procedure was deficient.


The employer was perhaps a little lax in terms of the rigorousness of the procedure and the EAT criticised a number of aspects including the fact that the employee had not been put on notice that redundancy was in the offing and the employer had not considered whether there were any alternatives to employment.


Neither of these aspects are contentious.  An employer will generally be expected to follow a fair procedure and an employee is expected to be given an opportunity to meaningfully comment upon any proposed redundancy.  Alternatives to redundancy should be considered.  Apart from anything else, an employer should generally be seen to act fairly.  This is not usually difficult – as long as sufficient time and resources are set aside, a fair redundancy procedure can be safely implemented.


However, the EAT added one additional ground to the list of unfair procedures.  It pointed to the fact that the employee had not been given an opportunity to appeal the decision to make him redundant.


Generally speaking, employment lawyers will not advise clients that there is any necessity to allow an appeal in a redundancy.  This can be contrasted with terminations following on from disciplinary procedures – in those cases, an appeal is considered to be an inherent and vital part of the procedure.  An employer who does not offer a right of appeal in such cases is at considerable risk if the employee challenges the decision to dismiss.


However, offering the right of appeal in a redundancy situation has not always been seen as an integral part of that kind of procedure.


Arguably, it is unnecessary.  The right of an appeal is a fundamental part of administrative fair procedures generally and the right to have a decision reviewed at a higher level is well-established.


A redundancy, on the other hand, should rightly arise from economic (or other) circumstances over which the employer has little or no control.  From that perspective, it is not a question of judgement and it is questionable whether the decision should be susceptible to appeal (although, in fairness, it could be considered just to allow an appeal in relation to the selection of roles for redundancy).


If this decision is followed (bearing in mind the fact that individual panels of the EAT do not automatically bind each other), it may be prudent for all employers to consider offering an appeal of a redundancy in all cases.


This is not necessarily something that will always be easy to do.  A business that is in the process of redundancies may well be under financial pressure and will not have the resources to facilitate redundancy appeals.


Nonetheless, if this is an emerging trend in the EAT, it is wise for employers to be aware of it and to make provision for it.


Patrick Walshe