Redundancy: An employer bumps into trouble in the EAT

So what is bumping?  You may have heard the term but cannot remember in what context. In summary, “bumping” is a technical term where an employee’s position is made redundant but they are transferred to another position, making the holder of that second position redundant instead.

Whilst bumping is not a new concept and rarely implemented, this case is a reminder to employers to consider bumping when embarking on a redundancy process. In this case, Mr. Mirab (the Claimant) was employed as a Sales Director for Mentor Graphics (the Respondent).  During a redundancy consultation process Mr Mirab was placed in a pool of one as there were no other Sales Director positions within the company. Following a series of meetings he was dismissed by reason of redundancy. He brought an unfair dismissal claim in the Employment Tribunal.

The basis of Mr Mirab’s claim was that the Respondent had not conducted a proper selection process of alternative jobs in the company. He also specifically raised the point that they had not considered bumping any other employee at a lower position (i.e. an Account Manager).

In determining whether the dismissal had been fair, the ET concluded the Respondent had done what it should in terms of looking for alternative roles and it had not been required to consider "bumping" any other employee working at a subordinate Account Manager level because such an obligation only arose if an employee themselves raised it. Further the Claimant had given no indication that he would have been willing to work as an Account Manager.  Mr. Mirab was unsuccessful in his claim of unfair dismissal and appealed to the EAT.

The EAT allowed the appeal. It found that the ET had erred in its approach to the evidence and specifically the consideration of looking at alternative positions. The EAT in particular noted that the ET made a finding that the employer was not required to consider subordinate positions unless raised by an employee. The EAT stated that this was incorrect and the band of reasonable responses had not been applied.

What should you be doing now?

It is advisable that employers consider the option of bumping in order to minimise the risk of a finding of unfair dismissal. If you are currently undertaking a redundancy consultation consider options regarding redeployment and ensure you get the employee to fully engage in the process regarding any other positions they may be interested in undertaking which may include bumping another employee.

What does this mean for you or your business?

Plan carefully any re-structure and seek legal advice in respect of the selection pool (if applicable) and consider the possibility of extending the pool not only horizontally due to an overlap in duties but also vertically due to the possibility of bumping.  Note that widening the pool could introduce uncertainty across many levels in the business and affect employees’ morale. To ensure there is limited disruption agree the pool with employees through consultation and ask them if they are  willing to consider a junior role.
 

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