The EAT has held that it can be unfair for an employer to fail to consider
offering an alternative subordinate position to a potentially redundant employee,
even in the absence of a vacancy.
In the case of Lionel Leventhal Ltd v North, N was employed as a senior editor
in a publishing business. When the company encountered financial problems,
N was selected for redundancy since he was the most expensive employee. The
tribunal upheld N's claim for unfair dismissal on the grounds that the company
had not entered into any discussions with N, had failed to seriously consider
any alternatives to redundancy and should have considered making a more junior
employee redundant instead and offering that position to N.
The EAT found that while the employer had in fact considered alternatives
to redundancy, there had been a failure to consider 'bumping' a more junior
employee instead. According to the EAT, whether or not such a failure is unfair
is a question of fact for the tribunal, to be based on the following factors:
whether or not there is a vacancy, how different the two jobs are, the difference
in remuneration, the relative length of service of the two employees, the qualifications
of the employee facing redundancy and any other factors which may apply in
a particular case.
It was also held that the employer may not rely on the argument that an employee,
who is facing redundancy but is willing to accept a subordinate position, should
initiate such discussions with management. According to the EAT, this was not
a hard and fast rule and therefore N's failure to communicate his willingness
to take a subordinate position did not provide the employer with a defence
to the claim of unfair dismissal.
Therefore, while bumping a more junior employee may not be necessary depending
on the circumstances, employers should ensure they consider the factors highlighted
by the EAT, when faced with a potential redundancy situation.
The question of compensation was remitted to the tribunal as, following the
decision in Polkey v AE Dayton Services Ltd, it was necessary to consider what
would have happened had the employer considered offering N a subordinate position.