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You are in: Home Page | About Thompsons | Information and Resources | LELR Issue 113

LELR Issue 113 (July 2006)

Contents

In the News
Automatically unfair...except for Polkey
Breach of procedure
A Brief Overview of Compromise Agreements
Age of Unreason
Politics of Race
Working Hours
Flying Visit

Automatically Unfair...except for Polkey

Alexander and anor -v- Bridgen Enterprises Ltd

The Polkey rule (that a dismissal is fair, whether or not the employer followed a fair procedure, because the employee would have been dismissed anyway) was partially reversed by section 98(A)2 of the Employment Rights Act (ERA) 1996.

In Alexander and anor -v- Bridgen Enterprises Ltd (2006, IRLR 422), the employment appeal tribunal has said that, where 20 employees or less are being made redundant, they must be given enough information at stage two of the statutory disputes procedure to respond to the redundancy and to know why they have been selected.

The RMT instructed Thompsons to act on their behalf.

What happened?

Following a financial crisis, the company decided to make nine workers compulsorily redundant.

At the first of two meetings in January 2005, the two claimants were told of the selection criteria that the company intended to use, but not their personal scores. Just before their (unsuccessful) appeal, they were told how the criteria were to be applied and the marks given to everyone in the pool.

What did they argue at the tribunal?

The employees claimed that their dismissals were automatically unfair under section 98A(1) of the ERA 1996, because their employer had not complied with the new statutory dismissal procedure. And they were also unfair under section 98(4) because they had failed to consult properly with them.

Relying on section 98A(2) – the “Polkey-reversal” section – the employers argued that, although they did not follow the correct procedure, the dismissals were fair because they would have dismissed the employees anyway.

The tribunal said that the employer had followed the three stages of the statutory dismissal and disciplinary procedure, and that there was a 100 per cent chance that Mr Alexander and Mr Hatherley would have been dismissed no matter what procedure was followed.

What did they argue on appeal?

Mr Alexander and Mr Hatherley argued that, to comply with section 98A(1), they should have seen the scores of everyone selected for redundancy and how they applied to the criteria in advance of the “step one” meeting in January. The employers argued that they just had to tell them that they might be made redundant.

The employees also argued that there had been no proper consultation. The employers said that was irrelevant, because the tribunal found they would have been dismissed anyway.

What did the EAT decide?

The EAT made the following findings:

• Step one of the standard procedure just requires employers to tell employees that they might be dismissed and why. In a conduct case, they must identify the nature of the misconduct.
• At step two, employers must tell the employee why they are contemplating dismissal.
• In redundancy dismissals, employers have to tell employees the reason for the redundancy, the selection criteria they are using and give them their assessment before the step two meeting, but not the assessments of other employees.

As the employers in this case had not given the employees enough information before the step two meeting in January 2005, their dismissals were automatically unfair.

The EAT said that section 98A(2) should not be narrowly construed. Employers could rely on it in respect of any breaches of a “fair” procedure, as long as they could show that the employee would have been dismissed in any event.

Comment

Two important principles have emerged from this case regarding the statutory dispute resolution procedures.

At the second stage of the dismissal procedure involving 20 redundancies or less, employees must be given enough detail to enable them to respond, to know why there is a redundancy situation, and to understand why they have been selected. This includes the individual’s score in the selection process.

But section 98(A)(2) of the ERA 1996 has to be given a wide interpretation, making it easier for employers to justify dismissals as fair, provided that they follow the statutory dismissal procedure.