Redundancy process was ‘insensitive’ and ‘perfunctory’

In the recent case of Thomas v BNP Paribas Real Estate, the EAT overturned an Employment Tribunal's finding that a dismissal was fair notwithstanding that the Employment Tribunal had considered that the redundancy consultation process was "insensitive" and "perfunctory".

Facts

Mr Thomas was employed for over 40 years as a Director in BNP’s property management division. After a strategic review of the division, BNP commenced a redundancy consultation process. On the same day the consultation commenced, Mr Thomas was informed that he was at risk of redundancy and was immediately placed on garden leave. He was specifically told by BNP not to contact customers or employees and his access to company systems and emails was suspended.

During the process, BNP had made a number of procedural errors which included the use of the wrong name when addressing Mr Thomas.  After his dismissal, Mr Thomas brought a claim for unfair dismissal and age discrimination. The basis for Mr Thomas’s age discrimination claim was that BNP had a history of staff nearing 60 being made redundant; he believed that the motive behind his dismissal was his age.

The Employment Tribunal, despite finding that there were a series of procedural failings and that the consultation was “insensitive” and “perfunctory”, found the dismissal fair. They also found that Mr Thomas’s discrimination claim was not tainted by age discrimination. His claims were dismissed.

Mr Thomas appealed the decision to the EAT. The EAT found that the Employment Tribunal had failed to provide reasons why it believed there had been sufficient consultation given its criticisms of the way the consultation was handled. The EAT stated  “…a troubling decision by the Tribunal………..When it has dealt with the consultation period it has been critical of the Respondent and in my judgment, was entitled to be so on a number of factual issues, and its description of the manner of consultation is strong criticism. What it appears to have failed to address in relation to that criticism is what, on the face of it, appears to be a particularly insensitive approach to the question of consultation, namely: sending him on garden leave. What is particularly troubling, however is that the Tribunal at one and the same time can call the manner of consultation perfunctory and insensitive and yet conclude that it was a reasonable consultation.’

On this basis the EAT concluded that the Employment Tribunal had failed to understand or to apply its finding of fact that consultation was insensitive and perfunctory.  It went on to say that the greatest criticism regarded putting Mr Thomas on garden leave when he was a long serving employee. The matter has been remitted to another Employment Tribunal to consider Mr Thomas’s claim.

What should you be doing now?

Whilst this case is another reminder to carry out meaningful consultation and not to just pay lip service to a redundancy process, it also highlights an important factor to consider when placing employees on garden leave. In this specific case the EAT took exception with Mr Thomas being placed on garden leave given his seniority. What the EAT found was there was no thought process as to why he was put on garden leave.

The aim of garden leave is to keep an employee out of the marketplace long enough for any information that they have to go out of date, or for the employee's successor to establish themselves, particularly with customers, so as to protect goodwill. The lesson from this case is that if you are about to place an employee on garden leave give some thought to the rationale behind this decision.

What does this mean for you or your business?

You will want to consider whether it is reasonable to place an employee who is "at risk" of redundancy on garden leave at the commencement of a redundancy consultation. Placing an employee on garden leave at the start of a consultation process can imply to a tribunal that there has not been a genuine consultation and you are going to dismiss – i.e. you have already made your decision (which ultimately could lead to an unfair dismissal finding). In this particular case there was no reason offered or  real explanation as to why it was considered that gardening leave was deemed necessary for such a senior and long-serving employee, given that consultation meetings had just commenced. 

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.