Employment Law Speed Read – 26/03/18
26th March, 2018
This week we look at redundancy selection and bumping, which occurs when an employee whose role is redundant is redeployed into another role, and the displaced occupier of that (second) role is dismissed.
Mirab v Mentor Graphics (UK) Limited
In Mirab v Mentor Graphics (UK) Limited, the Employment Appeal Tribunal (EAT) found that the Employment Tribunal (ET) had erred in finding that in a redundancy process, an employer need not consider “bumping” where it had not been raised by an employee.
Dr Mirab was employed by Mentor Graphics (UK) Limited (Mentor) in February 2013, as the Director of Sales. In February 2015, the sales force of the division was split into two, with some of Dr Mirab’s sales team being reassigned to a separate automotive subdivision.
In November 2015, it was decided that Dr Mirab’s division was not meeting its growth objectives and it was decided that his role was no longer required.
Dr Mirab was informed that he was being placed at risk of redundancy in February 2016 and a consultation process began. Mentor provided a list of internal alternative positions, but Dr Mirab did not find any of them suitable. Dr Mirab was subsequently made redundant.
On appeal, Dr Mirab suggested that he should have been compared with Account Managers outside of the UK, (a subordinate position to his Director role). Mentor stated that they only had to consider positions within the UK and in any event, Dr Mirab had not been employed as an Account Manager.
Dr Mirab brought a claim for unfair dismissal to the ET. The ET found that there was a redundancy situation which constituted a potentially fair reason for his dismissal.
When assessing the fairness of the redundancy process, the ET found that Mentor had correctly looked for alternative positions and did not need to consider bumping Dr Mirab into an Account Manager role, because the obligation on an employer to consider bumping only arose if the employee raised it.
The ET found that Dr Mirab had not indicated that he was willing to work as an Account Manager, and therefore Mentor did not need to consider making one of its Account Managers redundant in order to give Dr Mirab their role.
Employment Appeal Tribunal
The EAT found that the ET had erred in its approach to considering alternative positions.
The ET’s finding that an employer had no obligation to consider subordinate positions unless it had been raised by the employee was wrong.
The ET should have considered whether Mentor’s decision making process fell outside the range of reasonable responses because it had failed to considered bumping another employee. The ET was also incorrect in finding that Dr Mirab had not indicated that he would consider an Account Manager role.
However, the EAT confirmed that there is “no rule that an employer must always consider bumping in order to dismiss fairly in a redundancy case” and that the test will always be on the particular facts of a case, whether the employer’s actions were within the range of reasonable responses.
Although the EAT did confirm that bumping need not be considered in every case of redundancy for there to be a fair process, it does mean that employers need to be particularly aware of the possibility of bumping even where the at-risk employee does not raise it. To fail to do so could mean that a redundancy is procedurally unfair.
If you have any questions on the above and how it will affect you, please do not hesitate to get in touch with a member of our employment team.