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The De Banks Haycocks v ADP RPO UK case highlights the importance of early consultation in a redundancy process.
30 January 2025
Case Study
The case of De Banks Haycocks v ADP RPO UK Ltd has reached the Court of Appeal and provided some important findings on the matter of consultation in small-scale redundancies.
We know that specific rules apply to large-scale redundancies where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a 90-day period. In this situation the rules of the Trade Union and Labour Relations (Consolidation) Act TULR(C)A 1992 apply.
But what about small-scale redundancies where 10 or 15 people are likely to be made redundant? What level of consultation is required where the statutory collective consultation rules do not apply? This is what the case of De Banks Haycocks considered, where the employee had complained that there had been no “group” consultation.
The Claimant worked in a team of 16 recruiters. A drop in demand from the sole client meant that a decision was made to reduce headcount. This was a plan to reduce numbers overall although specific numbers were not initially identified. A scoring assessment was duly carried out, with the Claimant achieving the lowest score of the team.
A series of meetings took place with the Claimant- informing him of the potential redundancy situation, allowing him to ask questions and suggest alternatives. He was then advised of the selection criteria- but not his actual scoring. His employment was terminated and he appealed. As part of that appeal, he became aware of his scoring and chose to challenge it. His employer upheld his dismissal and rejected his appeal.
He then brought an unfair dismissal claim in the Employment Tribunal arguing that the selection criteria had been too subjective and that it had been applied to him unfairly. The Employment Tribunal (the “ET”) dismissed his claim even though it found that the criteria were subjective but said that this did not necessarily render his dismissal unfair. Further, the ET found that the information provided on appeal had been enough to remedy the earlier mistake of not notifying him of his own scores.
The Claimant then appealed to the Employment Appeal Tribunal (the “EAT”) which upheld his appeal. However, that decision was further appealed and cross-appealed (which is a lot of appealing!) to the Court of Appeal who essentially upheld the original decision.
Case Study
The Court of Appeal (“CA”) noted that it is good practice for consultation to cover proposals as a whole, even where consultation is not collective (i.e. there are small numbers affected and there is no union involvement).
Further, consultation should take place at a “formative stage” – not when decisions have been reached and when employees can have no real impact on the outcome. Instead, it should happen at a time when the employer remains open-minded and when the employee can realistically influence the decision.
The CA disagreed with the EAT’s previous suggestion that more widespread workforce consultation should take place. This seems sensible given that the EAT were suggesting an entire workforce be consulted even where one individual is facing redundancy.
The CA also found that it was poor practice to have applied the scoring before having begun consultation- this tended to suggest that the employee could not in fact have influenced the decision as to any alternatives to redundancy. However, in this situation, the CA found that the decision to terminate had not been made when the scoring was undertaken because the scoring could have been challenged and undertaken again. The fact that it was not changed did not seem to matter- the fact that it could have been reconsidered was enough. The employee had challenged his scores at appeal, and the employer had considered and rejected that appeal.
The CA judgment is helpful to employers in that it overturns the EAT’s previous suggestion that even small-scale job cuts should be dealt with via wider workplace consultation. This seems sensible.
Furthermore, the case tells us that the consultation that is required has to take place at a time that any employee affected can – realistically- influence the outcome. Although this employer “got away” with conducting the scoring prior to commencing consultation, it would be best practice to have commenced consultation first. This would allow those affected (i.e. those subject to scoring) to have some opportunity to comment on the criteria being used and, possibly, who is undertaking the scoring. However, it would seem that if the scoring can later be challenged during individual consultation and/or at any appeal this is not necessarily fatal.
The Employment Rights Bill proposes to remove the current definition of “establishment” which would mean that more companies are caught by collective consultation rules when operating redundancy processes. A far more thorough approach will be needed for organisations with multiple sites or offices as the limit at one establishment will no longer apply.
Furthermore, unfair dismissal is due to become a day one right from autumn 2026 meaning all staff would be able to challenge the fairness of their redundancy. Importantly, the “light touch” process during an initial period of employment does not appear to include redundancy so there will be no exemptions. Again, either of these issues is subject to change and we will of course keep you updated on the progress of the Employment Rights Bill.
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