Although voluntary redundancy is often regarded as lower risk than compulsory redundancy, there are still traps for the unwary employer. It usually makes sense to seek volunteers when a redundancy exercise is contemplated and, if an employee had already been thinking about leaving, it can be a good outcome for all concerned.
However, if there have been disputes with the employee in the past, or you believe they may later consider that there was unfairness in the restructuring, there is little to stop them from making an unfair dismissal claim. A defence that they had volunteered for redundancy will not always assist the employer, if a tribunal considers that there were defects in the process.
In the case of White v HC-One Oval Ltd (2022), the Employment Appeal Tribunal (EAT) has held that an employment tribunal was wrong to strike out a claim for unfair dismissal on the basis that it had no reasonable prospect of success, simply because the claimant had requested redundancy.
As background, the employer had announced it was reducing the number of employees carrying out reception and administrative work. Ms White was provisionally selected for redundancy. Subsequently, she requested voluntary redundancy, which was accepted.
After the termination of her employment, Ms White submitted a claim for unfair dismissal, alleging that:
- she had previously raised a grievance about having to cover the duties of an absent colleague as well as her own, without extra pay.
- during the redundancy process, another administrative role had become available, which should have been offered to her, but was not.
- the redundancy process concluded with a receptionist recruited just before it began (who had no childcare responsibilities) being offered a full-time role, while the two part-time receptionists had been dismissed. Ms White alleged that the process had been engineered to achieve this.
Ms White argued that the redundancy process was a sham and that she had been targeted for dismissal. The employer disputed her allegations and contended that she had been fairly dismissed for redundancy at her own request and that, therefore, her claim should be struck out because it had no reasonable prospect of success.
At employment tribunal stage, the tribunal agreed that because Ms White had requested redundancy, the employer would be able to establish the reasonableness of, her dismissal. However, Ms White appealed to the EAT, which found that the tribunal should have considered Ms White’s case more fully, including matters other than Ms White’s redundancy request. Even if the tribunal was satisfied with the reason for dismissal, it would still need to consider the fairness of the process.
The EAT concluded that there was a factual dispute which needed to be considered and it has remitted the case to the tribunal, where it will be considered by a different judge.
As a further reminder, a voluntary redundancy still amounts to a dismissal by an employer and shortcuts to the dismissal process can involve risk and the wider circumstances should also be considered in case of background weaknesses. Our advice is that you should document very carefully the steps taken when accepting a voluntary redundancy, including ensuring that sufficient consultation takes place (or asking the employee to confirm in writing that they waive their entitlement to full consultation), always holding a dismissal meeting and, perhaps counterintuitively, offering the right of appeal against the dismissal.