Employment Law Digest January 2025 – Case Law update

“Off the record” discussions

In Gallagher v McKinnon’s Auto and Tyres Ltd:

• The claimant was employed as a branch manager.
• The company managed successfully to cover the claimant’s role while he was absent on sick leave in June and July 2022 and so the directors considered they could continue without the need for a branch manager.
• The claimant was invited to a meeting which was described as a discussion concerning his return to work. However, the directors wanted to discuss making an offer to the claimant of an exit package. That package involved terminating his employment for the stated reason of redundancy with an enhanced redundancy payment of £10,000.
• During the meeting on 1 August 2022 , the claimant was informed that if he accepted an offer of £10,000, the parties would sign a compromise agreement; but, if he rejected it, the company would “go through a redundancy procedure”. The director sought to make the meeting a ‘protected conversation’, describing the proposal as “off the record” and “without prejudice”. The claimant was given 48 hours to consider the proposal.
• After the meeting, there was a further exchange of text messages by which a breakdown of the figure of £10,000 was provided in response to the claimant’s request. The claimant did not accept the proposal within the stated 48 hours, and so he was invited to a formal meeting on 4 August 2022 to discuss his potential redundancy. In due course, the respondent dismissed him. The claimant brought proceedings against the respondent for unfair dismissal, and he sought to rely on the discussion on 1 August 2022 as evidence of unfairness.
• The respondent argued that the pre-termination discussion was inadmissible as evidence in the unfair dismissal claim.
• The claimant argued that there had been impropriety on the part of the respondent in the way it had dealt with the 1 August 2022 meeting such that the default position of inadmissibility should be ousted and that he should be allowed to refer to the content of the meeting in his unfair dismissal claim.
• An Employment Tribunal (ET) disagreed with the claimant and ruled that the content of the meeting was inadmissible as evidence.
• The claimant appealed, arguing that it had been perverse for the ET to conclude that the claimant was not subjected to undue pressure.

The Employment Appeal Tribunal dismissed the appeal and held that:

• The ET judge had concluded that while it may not have been fair for the respondent to use a discussion about the claimant’s return to work as a pretext for raising with him the possibility of severance on agreed terms, it did not constitute improper behaviour to do so.
• Impropriety had to be assessed by looking at the aggregate effect of the pre-determined redundancy, the false pretences for the meeting and the 48-hour deadline. However, it was clear the judge concluded that these factors did not subject the claimant to undue pressure either individually or cumulatively; the judge was clear that the respondent did not behave improperly overall, and that judgment was open to her on the facts as she found them.
• Whilst the Acas Code recommends an employee being given a minimum of 10 days to consider an offer, that relates to considering a written offer. Severance negotiations between employers and employees can be quick or they can be lengthy; they can be simple or they can be tortuous; they can be amicable or they can be hostile; they can be straightforward or they can be legally complex. As a matter of common sense, the journey from initial proposal to written offer can take time. Ultimately, the judgment on impropriety is left to the ET to consider in view of all the relevant circumstances.
• In this case, the judge had regard to the fact that the claimant was swiftly provided with a breakdown of the figure offered; that the meeting was conducted calmly; and that he had time to discuss matters with his family. If the claimant had accepted the verbal offer, the pre-termination negotiations would have continued and, at some point, he would have been presented with written terms of a settlement agreement to consider.
• While another judge may have reached a different conclusion about whether 48 hours was sufficient, it was open to the judge in this case to conclude, having regard to all the circumstances, that it did not involve subjecting the claimant to undue pressure.

The judgment recognises that parties can reach an agreement in principle quickly, provided the employee is then given time to take advice, reflect and consider a settlement agreement.

Redundancy consultation

In De Bank Haycocks v ADP RPO UK Limited:

• The claimant was employed by ADP as a “sourcer” in London. In May 2020, ADP decided that it would need to make redundancies in the claimant’s team.
• ADP’s HR department asked the team manager to assess the employees in accordance with a “redundancy selection criteria matrix”, comprising 17 criteria. That exercise was performed and the claimant had the lowest overall score.
• A consultation timetable was then set under which all staff in the pool would be informed individually that they were at risk of redundancy, to be followed by a 14-day consultation period at the end of which, decisions would be communicated.
• The claimant was called to a meeting and informed that there would be a consultation period during which “we intend to discuss the selection criteria and process we will use to determine which role or roles will be redundant”. This clearly implied, contrary to the fact, that the “scoring process” had not yet taken place.
• The claimant was subsequently informed, at the final consultation meeting, that he was to be dismissed. He had not been told during the consultation process what his scores had been, or who had done the scoring or on the basis of what information; nor was he told that a scoring exercise had been carried out before the consultation started.
• The claimant appealed his dismissal. By the time of the appeal hearing he had been given his own scores, but not those of his colleagues. He argued his scores were too low, challenged the selection criteria and complained about the lack of consultation about his scores.
• The claimant’s dismissal was upheld and he brought an unfair dismissal claim.

The Employment Tribunal (ET) dismissed the claim of unfair dismissal, holding that the redundancy process was fair overall. In reaching its decision, the ET found that the appeal against dismissal had been conscientiously undertaken (noting that a procedural unfairness in a decision to dismiss can be cured by a fair internal appeal).

The claimant appealed to the Employment Appeal Tribunal (EAT). The EAT upheld the appeal.

• The EAT held that there was an absence of general workforce consultation at the formative stage in the case, meaning “there was never any opportunity to discuss the prospects of a different approach to any aspect of the redundancy process chosen by the employer”, which, it said, was “indicative of an unfair process”.
• The EAT stated that workforce level consultation was a requirement of good industrial relations practice in all redundancy situations, alongside individual consultation.
• The EAT substituted a finding of unfair dismissal.

ADP appealed to the Court of Appeal (CA). The CA allowed the appeal, restoring the ET’s decision:

• In cases where there is no collective consultation, it is good practice for employees to be given, in the course of individual consultation, the opportunity to express their views on any issue that may affect the risk of their dismissal or its consequences, whether it is peculiar to them as an individual or common to the affected workforce as a whole. A failure to afford that opportunity will not necessarily render any subsequent dismissal unfair: that will depend on the circumstances, but individual consultation is not only to address individual matters.
• However, the CA did not agree with the EAT that, for smaller-scale redundancies in non-unionised workplaces, it should be treated as a requirement of good industrial relations practice – or “the usual standard” – that the employer should in such cases conduct general workforce consultation.
• The CA reasoned that it was not clear what the EAT meant by “general workforce consultation”, that group meetings may be a useful way of ascertaining the views of employees, but their appropriateness will depend on the circumstances, and that the adequacy of consultation has to be considered on a case-by-case basis.
• The CA went on to consider what is meant by consultation occurring at a time when proposals were at the “formative stage”. The CA made clear that consultation must begin “at a stage where it can make a difference to outcomes” and that it does not necessarily equate to “early consultation” in a temporal sense. What matters is that the employer still has an open mind and not, as such, how soon after the proposal was first formulated the consultation occurs. However, the later in the process the consultation occurs, the greater the risk that the decision-maker will have closed their mind, but, whether that is so in a particular case is a matter for the factual assessment of the tribunal.

The CA upheld the appeal and restored the ET’s finding that the dismissal was fair.

Whistleblowing and the public interest requirement

In Durey v South Central Ambulance Service NHS Foundation Trust:

• The claimant was employed as a paramedic.
• He claimed he had made protected disclosures on a number of occasions during his employment, including (i) an email sent about changes to the student paramedic course claiming that this posed a threat to patients due to paramedics being unfit to practice and (ii) shortcomings in the handling of a disciplinary process after he had acted as a companion for a colleague.
• The Trust undertook an internal investigation, the claimant commenced sick leave and ultimately resigned.
• The claimant brought a claim in the employment tribunal that he had been subjected to detrimental treatment during employment on the ground of having made protected disclosures, and associated complaints of constructive unfair dismissal and wrongful dismissal.
• The Employment Tribunal (ET) found that:
  • the disclosure concerning changes to the paramedic course did not amount to a protected disclosure because he did not have a reasonable belief as regards the disclosure being made in the public interest, and further that no detriments were suffered by the claimant as a consequence of this disclosure; and that
  • whilst the disclosure about shortcomings in the handling of the disciplinary process was a protected disclosure, there had been no detrimental treatment.

The claimant appealed. The Employment Appeal Tribunal dismissed the appeal and held that:

• The ET did not err in its conclusion that the claimant did not reasonably believe that making changes to the course without prior notification to the HCPC posed a danger to patients, and, hence, he also did not reasonably believe that the disclosure was made in the public interest.
• The requirement that a disclosure be in the public interest could not be satisfied solely by the claimant’s own opinion. The tribunal did not find that he did not hold that belief. Its conclusion was simply that it was not reasonable for him to believe that the change gave rise to such a risk, looking at the overall picture of what he knew, or could reasonably have been expected to appreciate, about these changes, at the time.

The ET did not err in its conclusion that there was no detrimental treatment of the claimant. It had been entitled to reach that conclusion based on the evidence it heard and the tribunal’s overall findings sufficiently explained why the complaints did not succeed.