Hendy Group Ltd v Daniel Kennedy

The Employment Appeal Tribunal dismissed the employer's appeal against an Employment Tribunal finding that the claimant was unfairly dismissed by reason of redundancy because the employer failed adequately to consider alternative employment, in breach of the obligation identified in section 98(4) of the Employment Rights Act 1996. The Employment Tribunal's factual findings established that the employer took no proactive steps to assist the claimant to secure a different post, blocked internal applications by email and left the claimant without access to internal vacancy information during his notice period. The EAT held that those findings supported the Tribunal's conclusion that the employer had acted unreasonably and that no Polkey reduction should be applied to the compensatory award.

This was an appeal from an Employment Tribunal judgment (hearing by CVP on 4 November 2021; Reasons sent 6 December 2021) in which the Tribunal found that the claimant, a long-serving trainer, had been fairly selected for redundancy but unfairly dismissed because the employer failed to consider alternative employment. The claimant sought a declaration of unfair dismissal and a compensatory award; the Tribunal awarded compensation of 19,566.73 and made no Polkey reduction.

Background and facts:

• The claimant had been a full-time trainer since 2015 with extensive prior sales and managerial experience in the motor trade. A genuine redundancy situation arose in 2020 and the claimant accepted he had been fairly selected for redundancy.
• The Tribunal found that, during the seven-week notice period, the employer took no positive steps to help the claimant find alternative roles: HR did not proactively assist, the claimant lost access to internal email and intranet after returning his laptop, managers were not informed he was at risk, and vacancies existed across the group which the claimant attempted to apply for without meaningful internal support.
• The claimant applied for several internal roles; he was interviewed once and rejected, others were not progressed and at least one HR email indicated the claimant would not be considered for sales roles across the group.

Issues considered:

• Whether the Employment Judge applied the correct legal test in determining whether the employer had properly considered alternative employment (section 98(4) ERA 1996 and the "band of reasonable responses").
• Whether the Judge impermissibly substituted his own view for that of a reasonable employer.
• Whether the Judge erred in failing to apply a Polkey reduction when assessing remedy.

Court's reasoning and conclusions:

• The EAT accepted that the Employment Judge's exposition of the law could have been fuller, but concluded he had the correct test in mind, namely whether the employer acted reasonably under section 98(4) having regard to the size and resources of the undertaking.
• The EAT upheld the Tribunal's factual findings that no reasonable employer would have relied on simply telling the claimant to apply via public vacancies, that HR took no positive steps, and that the employer effectively blocked internal applications. Those factual findings justified the Tribunal's conclusion that the dismissal was unfair for failure to consider suitable alternative employment.
• On substitution, the EAT concluded the Tribunal did not improperly substitute its own view: the findings were factually based and relevant to assessing likely outcomes and remedy rather than replacing the employer's decision-making process with the Tribunal's view.
• On Polkey the EAT accepted that the employer advanced a strong point but concluded the Tribunal reasonably found that, on the balance of probabilities, had the employer performed the tasks it ought to have done the claimant would have obtained alternative work; accordingly no reduction was made.

Practical note: the judgment reiterates that the duty to consider alternative employment in redundancy situations is central to fairness under section 98(4) and that Tribunals are entitled to make factual assessments about the likelihood of an employee securing alternative employment when making Polkey adjustments.

Appeal dismissed. The EAT concluded the Employment Tribunal applied the correct legal test under section 98(4) ERA 1996 and that its factual findings — that the employer took no adequate steps to identify or assist the claimant to secure suitable alternative employment, effectively blocked his internal applications and failed to ensure he had access to vacancies — were open on the evidence. Those findings supported the Tribunal's conclusion that the dismissal was unfair and justified making no Polkey reduction to the compensatory award.

Appeal to the Employment Appeal Tribunal from an Employment Tribunal (Southampton) hearing conducted by EJ Housego on 4 November 2021, with Judgment and Reasons sent 6 December 2021; EAT judgment neutral citation [2024] EAT 106 (23 January 2024).