Redundancy and Fair Dismissal: The Importance of Exploring Alternative Employment

Redundancy can be a difficult but necessary decision for businesses. However, even in genuine redundancy situations, employers must follow fair procedures especially when it comes to helping affected employees find alternative roles. A recent case, Hendy Group v Kennedy, offers a reminder of just how important this is during the redundancy process.

The case at a glance...

Mr. Kennedy was employed as a training manager for car sales at the Hendy Group. Before taking up this role, he had over a decade of experience as a car salesperson. When the training manager position was made redundant, the company acknowledged that the redundancy was genuine and that Mr. Kennedy’s selection for redundancy was fair.

But the story didn't end there.

Mr. Kennedy claimed that his dismissal was unfair not because of the redundancy itself, but because of how the company handled the process of finding him another job within the business. The matter escalated to the Employment Appeal Tribunal (EAT) and they agreed with him. The EAT concluded that the dismissal was indeed unfair.

Where did the employer go wrong?

While the redundancy was genuine and the selection process fair, the employer failed in its legal duty to support Mr. Kennedy in securing alternative employment. The EAT found several critical failings:

• During his notice period, Mr Kennedy could only see job vacancies in the same way as external applicants.

• He was given no guidance or help in identifying what roles might be suitable for him to apply for.

• After his applications for several sales roles were rejected, the employer told him any further applications for sales roles would be unsuccessful as they questioned his motive in applying for them.

• HR communicated with him via an email account he couldn’t access.

• HR did not tell managers he was at risk of redundancy.

As a result of these missteps, the EAT found the dismissal to be unfair. Mr. Kennedy was awarded full financial losses. Interestingly, the EAT did not make a Polkey reduction. This because they believed that, had the employer acted fairly, Mr. Kennedy likely would have been redeployed into another role.

Again, this is an important warning to employers that redundancy isn’t just a tick box exercise. There is a requirement for them to genuinely engaging with the selected employees and to make real efforts to retain them wherever possible.

Hendy Group v Kennedy shows that failing to take meaningful steps to redeploy employees can turn a lawful redundancy into an unfair dismissal - with serious financial and reputational consequences.

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