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Employers have been warned to keep an accurate paper trail during redundancy procedures after an Employment Appeal Tribunal (EAT) upheld an unfair dismissal claim because the employer did not consider 'bumping'.
In the case of Lionel Leventhal Ltd v North, the EAT in London looked at whether the employer should consider 'bumping' - offering the employee less senior positions, whether vacant or not.
The tribunal ruled that an employer might be found to have unfairly dismissed its employee if it did not consider this, even if the alternative is a more junior position on less pay.
Katie Clark, senior associate in the employment team at law firm McDermott Will & Emery, said: "[The ruling] is saying when an employer makes redundancies, it should consider bumping. Employers need to ensure there is a paper trail so they are protected."
The tribunal also found that an employer cannot necessarily use the employee's failure to register an interest in less senior roles as a defence to unfair dismissal allegations.
"The employer shouldn't just assume that a senior employee won't accept a junior position," Clark said. "That is when the unfairness arises. The message to employers is not to make any assumptions."
Mary Chapman, chief executive of the Chartered Management Institute, said the point for any employer is that practices need to be fair and perceived as fair by their employees.
"Redundancy must be as a result of a genuine business decision. Employers need to be very clear and honest, and then follow the procedures through in the right manner."
The EAT has not decided that bumping must always be looked at in order for a dismissal to be fair. However, future tribunals may find that, depending on the circumstances, it should be considered.
The limit on the amount of compensation for unfair dismissal increases from £55,000 to £56,800 this week.
Go to www.personneltoday.com/25709.article for more on redundancy procedures
Questions to ask when considering 'bumping'
- Are there any vacancies, even if in less senior positions?
- How different are the roles?
- What is the difference in remuneration?
- What are the respective lengths of service of the two employees?- What qualifications does the 'at risk' employee have?
- Would the other employee take voluntary redundancy?
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