3 September 2012

When is a 'pool' of one in a redundancy selection exercise reasonable?

The danger of blithely assuming that a potentially redundant employee is in a "pool" of one is illustrated in the recent Employment Appeals Tribunal (EAT) case of  Wrexham Golf Co Ltd -v- Ingham.

The Facts:

The employer, a Club, employed 11 employees (including the Claimant). The Claimant was a Resident Club Steward and his responsibly including the management of the bar, cashing up and locking up on an evening and having sole responsibility for the Club over the weekend.

In October 2010 the club's Board made the decision that money needed to be saved. A sub-group was appointed to look at all aspects of the bar and catering facilities including the cost of staff. The sub-group's unanimous view was that the role of club steward was no longer required and that the bar and catering facilities would be combined to become one operation.

During his consultation period the Claimant wrote a letter to the board putting forward a number of points in his favour including the need to make redundancies in the bar as that was operating at a profit while the catering facility was operating at a loss. He also queried whether other areas within the Club had been considered for savings such as catering, administrative, greens and cleaning contracts.

Regardless of the above the Claimant was the only employee placed at risk of redundancy and was later made redundant. He appealed and his appeal was rejected.

A Board member who was originally part of the sub-group which made the redundancy decision was involved in the Claimant's redundancy hearing. Further, a different Board member who again formed part of the sub-group which made the redundancy decision was a panel member at the Claimant's appeal hearing.

The Employment Tribunal (ET) decision:

The ET decided that the Claimant was unfairly dismissed on the following basis:

1. The employer did not "act within the range of reasonable responses" in choosing to make the Claimant redundant as they failed to consider the possibility of establishing any kind of pool. They failed to consider whether there was any overlap between the work carried out by the Claimant and any of the other bar staff employed by the employer. 
2. The Claimant should have been provided with more information during the consultation process and
3. The employer should have ensured that decision-makers at the appeal hearing had not been involved in the original dismissal

The Employment Appeals Tribunal (EAT) decision:

The EAT upheld the appeal. The ET had not explained why it was unreasonable of the respondent to focus on the role of Club Steward without also considering the other bar staff for redundancy. S98(4) of the ERA required that question to be addressed and answered. There will be cases where it is reasonable to focus upon a single employee without developing a pool or even considering the development of a pool. The question which the EAT did not think the Tribunal really addressed was whether this was such a case

Conclusion:

If you are undertaking a redundancy exercise and consider an employee is in a "standalone" position, always make sure that you have proper, documented reasons for your decision.  If there are other employees who might be pooled with the standalone, make it very clear as to why you think they need not be.