Ashby v JJB Sports Plc

In a redundancy dismissal, an employer will normally be expected to give reasonable warning and consultation. The question under section 98(4) of the Employment Rights Act 1996 is whether the employer acted reasonably in the circumstances known at the time.

Consultation may be dispensed with where a reasonable employer could conclude that it would be futile. The law does not require a tribunal to describe the circumstances as exceptional. It must instead apply the statutory test to the particular circumstances, without converting relevant factors into inflexible rules.

A tribunal may read the parties’ cases and its reasons as a whole. It need not deal at length with unpursued possibilities of alternative employment.

The claimant, a senior manager with principal experience in payroll management, was dismissed for redundancy during a major reorganisation of the respondent retailer. The respondent created a new, more senior HR Director role and appointed an experienced external candidate without informing or interviewing the claimant. It concluded that the claimant was not qualified for that role and that no suitable alternative role existed.

The Manchester Employment Tribunal dismissed the claimant’s unfair dismissal claim. It found that warning and consultation would have been futile and held the dismissal fair. It also made an alternative 100% Polkey finding.

The claimant appealed, contending that the Tribunal had wrongly treated consultation as confined to the new HR role, failed to address alternative employment and exceptional circumstances, and gave inadequate or perverse reasons. The central issue was whether the Tribunal had erred in concluding that the absence of warning and consultation did not make the redundancy dismissal unfair.

1. Appeal dismissed. The Employment Tribunal made no error of law in holding that the dismissal was fair despite the absence of warning and consultation.
2. Under section 98(4) of the Employment Rights Act 1996, the issue was whether the respondent acted reasonably in treating redundancy as a sufficient reason for dismissal. The assessment concerned the employer’s actions and the circumstances known to it at the time. Consistently with Polkey v AE Dayton Services Ltd [1988] AC 344, a failure to warn or consult does not inevitably make a dismissal unfair if a reasonable employer could conclude that consultation would be futile.
3. The Tribunal had correctly applied that test. It was entitled to find that the newly created HR Director post was fundamentally different from the claimant’s former role, that he was not qualified for it, and that a competition for it would have been futile. The urgent reorganisation, the commercial sensitivity of the decisions and the claimant’s senior position were relevant circumstances.
4. Consultation is normally required and may cover avoiding redundancy, alternative work and other practical matters. However, the law did not require the Tribunal to label the relevant circumstances as exceptional. As explained by Duffy v Yeomans & Partners [1995] ICR 1, the statutory question must not be over-refined into rigid rules rather than assessed through the relevant circumstances.
5. The Tribunal’s reasons had to be read in the context of the case advanced before it. The principal contention below was that the claimant should have been considered for the HR Director role. There had been no significant challenge to the evidence that no other suitable alternative employment existed. Although an express return to that issue in the conclusions would have been preferable, the Tribunal had not left it out of account.
6. The alternative 100% Polkey reasoning was narrow because it did not specifically address alternative employment. Nevertheless, the evidence disclosed no significant prospect of other suitable work. That point did not undermine the dismissal of the appeal.

• Employment Appeal Tribunal: Appeal dismissed. The Tribunal upheld the Manchester Employment Tribunal’s dismissal of the unfair dismissal claim.
• Employment Tribunal (Manchester): On 24 October 2011, it held that the claimant’s redundancy dismissal was fair and made an alternative 100% Polkey finding.