UK: Redundancy: Pool of one

Whether a redundancy dismissal is fair depends on an employer carrying out a procedure which is fair and reasonable in the circumstances for the particular employer, and includes a fair selection process (including identifying redundancy “pools”). Even if an employer does not carry out a fair process, a Tribunal can decide that the compensation payable to an employee is nil because dismissal would have happened either way.

Mr Teixeira was employed as a “tandoor chef” working for a London restaurant in a team of 10 chefs. Mr Teixeira was a “helper” in all five departments of the kitchen but did not have the skills to run any of them.  The other nine chefs employed at the restaurant had over 10 years’ service with the restaurant.

In the early days of the Covid pandemic, Mr Teixeira was dismissed by reason of redundancy.  No procedure was followed.  The Tribunal decided that although no consultation process had been followed, Mr Teixeira was not entitled to compensation because there was a 100% likelihood that he would have been dismissed either way.  The reason for this was that either (1) Mr Teixeira was in a “pool of one” and would have been made redundant on that basis as he was the only affected employee, or alternatively (2) if a selection process had been carried out with the other chefs, Mr Teixeira would inevitably have scored lowest and been selected for redundancy.

The EAT disagreed and found that his dismissal was not inevitable and compensation was not automatically nil.  It needed to be considered what would have happened if there had been adequate warning and genuine consultation including how any selection criteria would have been applied before dismissing him.

Key Action Points for Human Resources and In-house Counsel

When a decision to make one particular individual redundant feels like an obvious choice, it is tempting for employers to reduce a consultation process to the bare minimum, and/or argue that there is a pool of one rather than carrying out a full selection process. However, this case shows that in the absence of consultation a Tribunal will need to think through each element of a hypothetical process to decide what the likely outcome would have been if a fair process had been followed. This includes giving the employee a chance to challenge the redundancy pool. Where possible, and where an employee has more than two years’ service, we would advise attempting to carry out some consultation, and working through the rationale for the pooling process if it is a pool of one. When taking decisions it is worth being aware that the more that is done, the more scope there is for a Tribunal to find that dismissal of an individual was likely or inevitable and reduce compensation accordingly.