Can voluntary redundancy form the basis of an unfair dismissal claim?

The EAT held that, taking Ms White’s claims at their highest (which the ET was obliged to do when considering an application for strike out) there could be no question of the claim not having reasonable prospects of success.

The ET would need to engage with the relevant evidence to determine whether there was a genuine redundancy situation and whether a fair process had been followed. The Tribunal was unable to scrutinise whether the decision maker had placed weight on matters other than just Ms White’s redundancy request without hearing any evidence. In those circumstances, strike out could not be considered appropriate. Ms White’s case was remitted to the ET where it will now proceed to a full merits hearing.

As this case highlights, employers should be mindful that requests for voluntary redundancy might still give rise to a claim for unfair dismissal and that it is a very high hurdle to get such a claim struck out before significant costs have been incurred.

As a minimum, employers should ensure that any request for voluntary redundancy is put in writing by the employee and the response should also be formally recorded. That in itself would not, however, prevent a claim where an employee becomes disgruntled during any redundancy process or upon termination.

Employers may want to consider using settlement agreements that accurately reflect that an employee has requested voluntary redundancy and which prevent them from subsequently seeking to bring any potential claims arising out of that request or an employer’s failure to otherwise follow a full redundancy process.

In circumstances where an employee enters into a settlement agreement, employers should be mindful that any misrepresentation on their part may lead to further protracted disputes around whether the agreement itself remains binding. For instance, if the employee’s employment terminates on the basis of an agreed voluntary redundancy and the employer then immediately recruits a replacement without the employee being made aware before they make their request for voluntary redundancy, that may lead to questions around whether any settlement was entered into on the basis of a misrepresentation, which could in turn lead to arguments about whether that agreement was, in fact, binding.

Employers should, therefore, always ensure that they fully explain the circumstances leading up to redundancy as completely and as accurately as possible to avoid any claims of misrepresentation.