When managing redundancies – must an employer consider alternative employment?

Overview

In the case of Hendy Group Ltd v Mr Daniel Kennedy, the Employment Tribunal was asked to decide whether the employer had properly fulfilled its legal obligation to explore alternative employment during a redundancy process. The Tribunal ultimately found that Mr Kennedy had been unfairly dismissed, as his employer had failed to make reasonable efforts to find him another role within the organisation.

What Happened?

Mr Kennedy worked as a trainer at Hendy Group Ltd’s Training Academy. In 2020, following the impact of the COVID-19 pandemic, the business faced a redundancy situation. While Mr Kennedy accepted both the need for redundancies and his selection, he later challenged the fairness of his dismissal, arguing that his employer had not done enough to support him in finding a suitable alternative position.

Mr Kennedy’s Concerns Included:

• Job vacancies were only visible to him as they would be to external applicants, with no internal priority or early access.

• He received no support or advice from the HR team to help identify roles that matched his skills and experience.

• Managers across the organisation were not made aware that he was at risk of redundancy.

• Despite having over 10 years’ experience in sales roles, his applications for internal sales positions were rejected without meaningful engagement.

• He was even told that his motivation for applying was in question and that future applications would not be successful.

Despite his own proactive efforts, Mr Kennedy felt there was a complete lack of support from both HR and his line manager. No alternative role was offered, and he was ultimately made redundant.

What Did the Tribunal Decide?

The Employment Tribunal found that Mr Kennedy had been unfairly dismissed. Hendy Group Ltd had failed in their duty to genuinely explore alternative roles within the business.

Key Tribunal Findings:

• The employer took no meaningful steps to assist Mr Kennedy in securing alternative employment.

• The HR team failed to communicate or support the internal application process.

• Mr Kennedy’s job applications were not given proper consideration.

• The dismissal was deemed unfair because the business had not met its obligation to seek suitable alternatives to redundancy.

As a result, Mr Kennedy was awarded £19,566.73 in compensation. Importantly, the Tribunal made no “Polkey reduction”, concluding that had Hendy Group acted fairly, Mr Kennedy likely would have secured another role within the company.

The “Polkey” principle is named after the case Polkey v AE Dayton Services Ltd [1987] and refers to situations where a dismissal is found to be unfair, but compensation is reduced because the outcome would have been the same even with a fair process.

What Can Employers Learn from This Case?

This case is a useful reminder that when going through a redundancy process, it’s not just about following procedure – it’s also about ensuring people are treated fairly, with genuine efforts made to help them stay in work if possible. We have all our expert guidance on navigating redundancies here.

Key takeaways for Employers:

1. Be Proactive About Redeployment
If someone is at risk of redundancy, take clear, proactive steps to help them find another role. Offer guidance, speak with line managers, and make sure the person is aware of relevant vacancies.

2. Treat Internal Applications Fairly
Applications from employees at risk of redundancy should be given serious, unbiased consideration. Avoid assumptions about motivation and treat each case on its merits.

3. Communicate Clearly and Consistently
Keep the lines of communication open. Employees should be informed about what’s happening, what support is available, and what steps the company is taking on their behalf.

4. Keep a Clear Paper Trail
Document every step of the process – from initial discussions to the outcome of job applications. This can be invaluable in the event of any legal claim or tribunal hearing.

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