Redundancy can be a necessary, but never a positive process for any business, and can create much uncertainty and stress to those at risk of redundancy. It is because of the negative impact redundancy can have on employees, that the law requires employers to (1) consult affected employees; (2) look for alternatives to redundancy; and (3) adopt a fair process for selecting the employees who are to be made redundant.
‘Bumping’ is a procedure where an employee who is at risk of redundancy (employee A), is moved to another position within the business, with the current occupier of that position being dismissed instead (employee B).
The Employment Appeal Tribunal (EAT) in the case of Mirab v Mentor Graphics (UK) Ltd considered the extent to which employers must consider bumping as an alternative to redundancy.
The claimant, Dr Mirab worked as a Director of Sales for the respondent, Mentor Graphics (UK) Ltd (Mentor), starting in 2013. Dr Mirab was successful in his role, but Mentor’s sales in the Embedded Systems Division were lower than forecast in 2013 and 2014. On 1 February 2015 Mentor restructured the sales force, the effect of which was Dr Mirab no longer earned commission from the automotive sector (Mentor’s most successful sector at the time). Dr Mirab communicated his unhappiness to Mentor, but ultimately continued to work with Mentor. In November 2015, Mentor concluded that Dr Mirab’s position was no longer needed.
On 3 February 2016, Dr Mirab was informed he was at risk of redundancy. During subsequent consultation discussions, Dr Mirab accused Mentor of engineering the redundancy situation. Mentor gave Dr Mirab access to an internal website showing all their vacancies (around 10 in the UK, 275 worldwide). Dr Mirab found nothing suitable. On 29 February 2016, Mentor concluded they hadn’t been able to avoid Dr Mirab’s redundancy and said his notice of termination would start that day. Mentor sent Dr Mirab a letter outlining the reason(s) for redundancy, and advised he had a right of appeal. Dr Mirab appealed but it was rejected.
Dr Mirab went to the Employment Tribunal (ET), claiming that he was unfairly dismissed. The ET found that Dr Mirab was not unfairly dismissed, but curiously mentioned the following about the consideration of bumping when looking at alternatives to redundancy:
“It might have been possible for the respondent in the UK to consider within the wider company the possibility of “bumping”…but the claimant [Dr Mirab] himself did not suggest it…if the claimant himself had suggested it, the respondent would have been bound to consider that suggestion.”
Dr Mirab appealed to the EAT.
The EAT disagreed with the ET’s approach when considering bumping. The EAT clarified that there is no strict rule stating an employer must consider bumping in a redundancy situation, but that equally there is no rule that an employer does not need to consider bumping unless the employee raises it. The EAT confirmed that the key question is whether the decision to dismiss by reason of redundancy falls within the reasonable band of responses.
The EAT’s decision reinforces bumping off as a possibility that should be considered if relevant when looking at alternatives to redundancy. However, the overriding consideration should always be that of whether the decision to dismiss those selected to be redundant is reasonable. This is key to avoiding an unfair dismissal claim from a former employee.
By Zahid Reza
Case report: Mirab v Mentor Graphics (UK) Ltd
Image used under CC courtesy of nikoretro