A cautionary tale of redundancy

Alexandria Evans is an associate in the employment law department of Lupton Fawcett.

The case of Thomas v BNP Paribas Real Estate is a reminder to employers to take care when conducting redundancy consultation processes as a failure to do so could render subsequent employee dismissals unfair and lead to claims for compensation.

Mr Thomas had worked for the bank for over 40 years and was a Director in the Property Management Division. Following a strategic review, his role was placed at risk of redundancy.

Mr Thomas was first informed of the situation when he was called to a brief meeting and told he was at risk of redundancy. At the same time he was immediately placed on garden leave and told not to contact his clients or colleagues.

Whilst the bank subsequently purported to undertake a redundancy consultation process with Mr Thomas, the bank made numerous procedural errors and basic mistakes.

During the first redundancy consultation meeting, Mr Thomas was informed that he would not have any access to the bank’s systems or email and Mr Thomas alleged that he had subsequently been escorted from the building.

He received further correspondence from the bank and on 16 January he was provided with a list of vacancies and made alternative suggestions. The bank’s letter to Mr Thomas of 8 January had the wrong name on (being addressed ‘Paul’ instead of ‘Peter’).

A final consultation meeting took place with Mr Thomas on 13 February, immediately following his return from annual leave and during this meeting, his role was confirmed as redundant. The bank wrote to Mr Thomas on 14 February to confirm his redundancy and this letter specified the wrong termination date.

Mr Thomas’ appeal against his redundancy was unsuccessful and he brought Tribunal claims of unfair dismissal and age discrimination.

The Employment Tribunal strongly criticised the bank’s redundancy consultation process, which, given Mr Thomas’ 41 years of employment, had been conducted in a “perfunctory” manner and with a “lack of sensitivity”. Perhaps surprisingly, the Employment Tribunal went on to conclude that the redundancy consultation had been reasonable in the circumstances.

Mr Thomas appealed against the finding that his dismissal was fair and the Employment Appeal Tribunal upheld this appeal and remitted the unfair dismissal claim to a different Employment Tribunal.

The EAT criticised the decision to put Mr Thomas on garden leave and to prohibit contact with colleagues during the consultation period. In particular, it was ‘troubling’ to the EAT that the Employment Tribunal could describe the manner of consultation as “perfunctory and insensitive” but subsequently conclude that the consultation process had been reasonable. The EAT found that the Employment Tribunal had failed to explain why it had reached such a decision.

This case highlights the need for employers to manage communications with employees during a redundancy process appropriately.

Whilst an employer may want to protect its confidential information and to manage communications with clients, this needs to be done in a proportionate way. It is often the case that employees remain in the workplace during redundancy consultation without issue and employers should therefore consider whether there is a genuine need to prevent contact with clients and colleagues.

Employers should ensure that consultation begins when the proposals are still at a formative stage and not when a decision to dismiss has already been made. The fact that Mr Thomas was immediately placed on garden leave and denied contact with clients or colleagues was unlikely to have assisted the bank to convince the Employment Tribunal that the redundancy consultation process was fair.