When hearing an unfair dismissal claim on the basis of redundancy, tribunals have to consider the reasonableness or otherwise of the decision to dismiss. In Aramark (UK) Ltd v Fernandes, the Employment Appeal Tribunal (EAT) held that it was not unreasonable for an employer to refuse to place a redundant employee on an ad hoc list of workers, not least because it would not have avoided his dismissal.
Basic facts
Mr Fernandes was dismissed by his employer on the ground of redundancy. The company then failed to include him in a pool of people that it turned to when it had a labour shortage. Although being on the list did not mean that the company had an obligation to provide work to those on it, it gave those workers a reasonable chance of obtaining work, albeit on an ad hoc basis.
Mr Fernandes claimed unfair dismissal. His employer claimed that the dismissal was fair as his position had been made redundant. The issue for the tribunal to consider was whether or not the company had complied with section 98(4) of the Employment Rights Act (ERA) 1996 when it failed to include him on the list.
Relevant law
Section 98(4) ERA states that the fairness of a dismissal:
“a) depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and
b) shall be determined in accordance with equity and the substantial merits of the case”.
Tribunal decision
The tribunal judge accepted that the failure of the company to put Mr Fernandes on the list was unreasonable and in breach of section 98(4). As such, he had been unfairly dismissed.
EAT decision
The EAT made clear that the first step for the tribunal was to satisfy itself that the employer had a “sufficient reason” for dismissing their employee. In this case it was redundancy.
In turned its attention to the decision in Williams v Compair Maxam Ltd which set out a number of principles that should guide a reasonable employer in the circumstances now covered by section 98(4). In particular, the judge noted that, when making redundancies, employers should do “as much as reasonably possible … to mitigate the impact on the work force and to satisfy them that the selection has been made fairly and not on the basis of personal whim.”
In this case the EAT held that, as section 98(4) deals with the reasonableness or otherwise of the decision to dismiss, the employer’s decision not to place Mr Fernandes on the list of workers which it used on an ad hoc basis was not something that fell within its scope.
By giving the words of the statute their ordinary or natural meaning, the EAT concluded that the company was not therefore required under the law to offer Mr Fernandes a place on the list.
This is because “the mischief s.98(4) seeks to address is the mischief of dismissal. It does not provide a statutory right to an alternative that might have had the potential to mitigate the adverse effects of dismissal”.
The EAT therefore upheld the company’s appeal.
Comment
The EAT effectively found that failing to place the claimant in a pool of workers which the employer turned to when they had a labour shortage did not amount to a failure to consider alternative employment. Therefore, the employer’s decision not to place him in this pool was irrelevant to the question of whether or not it was reasonable for the employer to dismiss him.