Haycocks v ADP: Analysing the Scope of Redundancy Consultation

The Court of Appeal in October handed down its judgment in ADP RPO Limited v Haycocks, rejecting the Employment Appeal Tribunal’s (“the EAT”) suggestion that “general workforce consultation” applies to small-scale redundancies (namely those redundancies where the collective process is not triggered). This article reflects on the Court of Appeal’s decision and identifies the key take-away points for employment lawyers and those directly involved with redundancy situations.

Haycocks: Basic Facts

ADP RPO UK Ltd (“ADP”) runs a recruitment process outsourcing business. ADP employed Mr Haycocks as a “sourcer” for Goldman Sachs.

Towards the end of May 2020, ADP began a redundancy process to reduce its headcount. On 18^th June 2020 ADP decided that two individuals within Mr Haycocks’ team would be made redundant.

Mr Haycocks attended a first consultation meeting on 30^th June 2020. A second consultation meeting took place on 8^th July. On 14^th July 2020 the Claimant was called to a further meeting where he was told that he would be dismissed, and he was handed a dismissal letter.

The significant feature of that consultation process was that Mr Haycocks had not been provided with any information about the scores relied upon to select him for redundancy, including the information upon which the scoring had been based. It also transpired that the scoring exercise had been carried out before the consultation process started.

Mr Haycocks exercised his right of appeal under ADP’s redundancy process. He complained, amongst other things, about the lack of consultation about his scores. During the redundancy appeal process, Mr Haycock was given the information he requested about how he had been scored, although he was not given the scores of the other members of the team.

Employment Tribunal

The Employment Tribunal rejected Mr Haycocks’ claim. The Judge acknowledged that Mr Haycocks knew nothing about his scores until the appeal stage but that once he became aware of the scores, he could not demonstrate that his own score should be higher and that the scores of others in the selection pool should have been lower.

EAT

Mr Haycocks appealed to the EAT. Several grounds were advanced to support that appeal, including the following:

1. The decision to dismiss had been taken before consultation started.
2. Mr Haycocks had not been informed of his scores until the redundancy appeal.

The EAT held that even in workplaces where there was no Trade Union presence, it was good industrial practice to engage in “general workforce consultation”. ADP had not consulted its workforce collectively, which led the EAT to conclude that the redundancy process had fallen short of what is ordinarily to be expected in a fair redundancy process.

Court of Appeal

The Court of Appeal rejected the EAT’s finding that there is a requirement for “general workforce consultation” in non-unionised workplaces. It held that the EAT had been wrong to suggest that an employer should conduct general workforce consultation in order to provide employees with an opportunity to comment upon issues common to the affected workforce as a whole [52]. There is no rebuttable presumption that a dismissal will be unfair where there had been no consultation of that kind [53]. The Court of Appeal also observed that this point had not been raised within the grounds of appeal and that it was a new argument, put forward by the EAT itself [65].

The Court of Appeal considered the passage of Glidewell LJ in R v British Coal Corporation ex parte Price [1994] IRLR 72 which held that fair consultation means “consultation when the proposals are at a formative stage”. Underhill LJ held that “formative” means at a point at which the employee can realistically still influence the decision. It did not mean that there must be early consultation in a temporal sense [60].

The Court of Appeal observed that it was “good practice to give the employees at risk the opportunity to comment on the selection criteria to be used…before the exercise was done”, but a failure to do so will not inevitably result in the redundancy process being unfair [73]. That position could still be rescued if the employer remained open to persuasion during the consultation process that the criteria were flawed (or that the process was otherwise unfair) [74].

Summary

The Court of Appeal’s decision reaffirms, and provides a useful reminder of, the fact that the fairness of a decision to dismiss by reason of redundancy will revolve around the circumstances of the individual case.

• Williams v Compair Maxam Ltd [1982] ICR 156 remains the leading case on consultation in redundancy situation. There is no requirement for general workforce consultation when dealing with small-scale redundancies.
• Consultation should cover issues that might affect the entire workforce, such as ways of avoiding redundancies or the number of roles to be made redundant, as well as considering issues affecting individual employees, such as their scores and the suitability of alternative employment.
• Consultation at a formative stage in the process means that it should occur at a point when the employee is still capable of influencing the outcome of the process. It does not mean that there must be ‘early’ consultation in the temporal sense.
• In terms of scoring, employees should be given their scores during the consultation process. They should also be given the chance to comment on those scores [77, Haycocks].
• Any procedural unfairness is capable of being cured by a fair internal appeal [75, Haycocks].

These principles will be well-known to employment lawyers, and will certainly be more familiar than the EAT’s ill-fated suggestion that collective consultation extends to small-scale redundancy situations.