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A recent Employment Appeal Tribunal (EAT) case, White -v- HC One Oval Limited (Ms N White v HC- One Oval Ltd: [2022] EAT 56 – GOV.UK (www.gov.uk)) demonstrates some of the issues that may arise in a voluntary redundancy situation.
21 April 2022
Case Study
Ms White was employed by HC-One Oval Ltd (HC-One) as a receptionist at one of their care homes in East Sussex.
In 2018, HC-One announced proposals to reduce the number of employees carrying out receptionist and administrative work in a number of its care homes, including the home in which Ms White worked.
Ms White was provisionally selected for redundancy and during the redundancy process she requested voluntary redundancy, which was agreed. Her employment was subsequently terminated on 08 October 2018.
In bringing a claim for unfair dismissal, Ms White argued that she had volunteered for redundancy because she believed her provisional selection for redundancy was artificially manufactured by HC-One due to her working part time hours and the fact she had previously raised a grievance alleging that she had taken on additional responsibilities without an increase in pay amongst other matters. She pointed to the fact that HC-One had, just prior to the redundancy process starting, hired a full-time employee in a comparable role and it was this employee who had been retained. Ms White questioned whether there was a genuine redundancy situation. She further alleged that she had not been offered a suitable alternative vacancy and so questioned whether a fair process had been followed.
The Employment Tribunal (ET) struck out Ms White’s claim for unfair dismissal on the grounds that they felt it had no reasonable prospects of success as Ms White herself had requested redundancy. By requesting voluntary redundancy, the ET felt that HC-One would be able to satisfactorily establish the reason and reasonableness of the decision to terminate Ms White’s employment. The ET heard no evidence on the matter.
Ms White appealed the ET’s decision and the EAT allowed the appeal.
Case Study
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.
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