No Duty To Put Employee At Risk Of Redundancy On ‘Bank List’ Of Potential Recruits

In Aramark UK v Fernandes, the Scottish Employment Appeal Tribunal (EAT) had to decide whether an employer’s failure to put an employee who was at risk of redundancy on a list of people to whom it could offer employment, if it was short-staffed, made the employee’s dismissal unfair.

Aramark UK v Fernandes

Case background

When dealing with an unfair dismissal case, the Employment Tribunal (ET) has to decide whether the dismissal was fair according to the ‘reasonableness test’ in section 98(4) of the Employment Rights Act 1996 (ERA). This will involve considering whether the employer followed a fair procedure.

In a redundancy case, it is well established that procedural fairness requires an employer to take reasonable steps to find suitable alternative employment within its organisation (or its group, if it is part of a group) before dismissing an employee.

Facts

Aramark had a redundancy situation. It kept a list of around 120 people with different skill sets that it could turn to if it was short-staffed, referred to as the ‘bank’ or ‘pool’. Aramark used the list regularly and those on it had reasonable prospects of obtaining ad hoc work.

Mr Fernandes was selected for redundancy, Aramark did not put him on the list and he was dismissed as redundant. Mr Fernandes brought an unfair dismissal claim against Aramark, arguing that he ought to have been put on the list when he was being considered for redundancy as it would have offered him the chance of employment (which would have been better than no employment).

The ET decided that Aramark’s failure to put Mr Fernandes on the list was unreasonable and a breach of section 98(4) ERA and that, consequently, Mr Fernandes had been unfairly dismissed. Aramark appealed.

Decision

The EAT upheld Aramark’s appeal and found that Mr Fernandes had not been unfairly dismissed. In doing so, it held that section 98(4) ERA deals with the reasonableness or otherwise of the decision to dismiss and focuses on the availability of other reasonable alternatives to dismissal. It decided that placing Mr Fernandes on the list would not have avoided dismissal (i.e. being placed on the list would have opened the prospect of work, but would not have secured work).

Comment

This case is about an employer’s duty to seek alternative employment opportunities for an employee before making them redundant.

As set out above, an employer should, before deciding to dismiss an employee as redundant, take all reasonable steps to find the employee alternative employment within its organisation (or group).

With respect, we consider that the EAT’s decision in this case should be treated with caution. We would recommend that potentially redundant employees be placed on lists similar to the one in this case, so that they are given every reasonable chance of securing alternative employment prior to dismissal for redundancy.