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CRAIG RAJGOPAUL ON THE DANGERS OF FAILING TO CONSIDER ‘BUMPING’ IN A REDUNDANCY SITUATION

‘Bumping’ typically occurs when an employer makes a more junior employee (whose role is not at risk of redundancy) redundant, and puts the more senior employee whose role is redundant into that (less well paid) role. My experience over the last 13 years of practice has been that, in a redundancy situation, many employers do not consider ‘bumping’ at all – indeed, I have met a number of experienced HR professionals who had not heard of the term. However, Employment Tribunals often raise the issue when unfair dismissal cases are heard, and that can trip employers up.

In Mirab v Mentor Graphics Limited UKEAT/0172/17DA, the EAT (HHJ Eady QC) has held that there is no rule that an employee at risk of redundancy must tell their employer that they wish to be considered for a more junior role before the employer must consider bumping. That is significant: a failure to consider (or consult about) bumping can render a dismissal unfair.

Equally, the EAT held that there is no rule that an employer must always consider bumping (or raise it with the employee) in order fairly to dismiss in a redundancy situation, particularly where this might involve the employee in question being moved into a subordinate and less well paid role. Rather, the question for the Tribunal is whether, on the particular facts of the case, what the employer did fell within the range of reasonable responses.

In Mirab the Claimant was the Director of Sales for one division, and the Tribunal found that there was a genuine redundancy situation. The Claimant had expressed the view in the past (although not as part of the redundancy process) that, if he were treated as an Account Manager (effectively the level below the Director of Sales), he would view that as a constructive dismissal. The Tribunal found that placing the Claimant in a pool of one (rather than pooling him with the Account Managers) fell firmly within the range of reasonable responses. 

During the redundancy consultation, the Claimant said that he had not considered any of the alternative vacancies that the employer had provided him with, but he did suggest that one of the Account Managers should be made redundant rather than him (although the employer said that it understood that suggestion to be made on the basis that the Claimant should be retained as Director of Sales, not that he would accept a lower role). 

The Tribunal found that the Claimant had never offered to take an account manager position, and that since the Claimant himself had not suggested bumping, the Respondent did not have to consider it. The EAT held that that was (arguably) wrong on the facts and, in any event, it was an error of law to suggest that the Claimant had to raise bumping in order for the employer to have to consider the issue. The question is always whether a failure to consider bumping falls within the range of reasonable responses.

The EAT remitted the case to the Tribunal for consideration, whilst noting that on the particular facts of the case “it would be hard to suggest that the Respondent itself was bound to raise” bumping because: (i) there were no Account Manager vacancies at the relevant time; (ii) the Claimant had not identified any suitable vacancies from the list provided to him; and (iii) the Claimant had previously forcefully objected to being employed as an Account Manager. However, the Claimant’s suggestion that an Account Manager should be made redundant instead of him was (at least arguably) sufficient to mean that the employer should have considered bumping here.

Helpfully, the EAT said that, even if (on the facts) the Claimant did give an indication that he might take a less well paid role, the Tribunal might find that the employer reasonably rejected it given, for example, the significant pay difference or that it would require the employer to dismiss another employee. However, the Tribunal had to determine that issue.


What does this mean for employers?

Employers (or, at least, well advised employers) have become used to giving consideration to the appropriate pool for redundancy, documenting their reasons for deciding upon a pool, and consulting about the pool. Employers need to start taking the same approach to bumping. Employers should be discussing with at risk employees, as part of the consultation process, whether or not the employees would be prepared to take a suitable alternative role at a lower salary. Many employees will say no, which will put an end to the matter. However, where an employee indicates that they would be prepared to take a role at a lower salary, then consideration should always be given to bumping (and the employee should be consulted about that issue). 

That does not mean that – where an employee indicates that they would be interested in a lower paid role – employers will have to conclude that they must bump a more junior employee. On the contrary, there may often be good reasons for concluding that bumping is not appropriate. However, employers should apply the same approach to the issue as they do all other aspects of the redundancy process and ask: is it likely that we can persuade a Tribunal that this approach is within the range of reasonable responses?

The risks (whether a compensatory award calculated on the basis that the employee would have accepted the lower position, or - in some cases - an order for re-instatement or re-engagement with back pay) make it dangerous not properly to consider and consult about bumping.

By Craig Rajgopaul

Posted: 26.03.2018 at 10:38
Tags:  Comments  Employment Law
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