Redundancies and alternative employment: what is expected of employers

A recently published decision from the Employment Appeal Tribunal illustrates why the duty to explore alternative employment when employees are being made redundant goes further than sending them a list of vacancies.

It has long been established that for a dismissal on redundancy grounds to be fair, an employer is expected to take reasonable steps to explore options for alternative employment, right up to the point at which the notice of dismissal expires. But it is rare for the extent of this duty to be explored at an appellate level.

The EAT has now published a decision involving the Hendy Group, a car dealership which sells more than 20 different brands across the South of England. According to its website, it currently turns over £1 billion a year.

It had appealed against a 2021 employment tribunal ruling, which had decided that Daniel Kennedy had been unfairly dismissed and awarded him over £19,500 in compensation. At the time of his dismissal, Mr Kennedy was a trainer at the Hendy Group’s training academy, but he had previous experience in sales. 

The employment tribunal accepted that there was a genuine redundancy situation, due to the COVID pandemic, and that his selection for redundancy had been fair. However, it decided that the employers had not taken reasonable steps in relation to alternative employment, and the dismissal was unfair for that reason.

In a decision which was made in January 2024, but was only published earlier this year, the EAT dismissed the appeal. 

The EAT noted that the employer had done little other than to tell Mr Kennedy that he could apply for vacancies on their website. A week into his seven-week notice period he was asked to return his laptop, and after that had no access to internal mail or the internet. As a result, he had only the same access as any member of the public to the jobs notified on the website.

HR failed to tell mangers that Mr Kennedy was at risk of redundancy. In addition, the EAT noted that that there was no evidence of other steps a reasonable employer might have taken. Examples it gave were:

• speaking to employees about where their interests might lie;
• assisting in identifying other roles; and
• encouraging conversations about different roles even if that meant demotion.

In concluding that “no reasonable employer” would have acted – or failed to act – in this way, the EAT was no doubt influenced by the fact the Hendy Group is a large employer and at the time had several vacancies for which Mr Hendy would have been qualified. 

However, the decision is an important reminder to all employers that even if the decision to dismiss an employee on redundancy grounds cannot be criticized, they are expected to actively assist the employee to explore options for alternative employment. Simply handing out a list of vacancies is unlikely to be sufficient.

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