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‘Bumping’ and Redundancy

As many readers will know, ‘bumping’ in a redundancy context is where an employee’s role is redundant but instead of that employee losing their job, they are redeployed to someone else’s role, with the other employee being made redundant instead.

Is an employer always required to consider ‘bumping’ when going through redundancy selection?

This was recently considered by the Employment Appeal Tribunal in Mirab v Mentor Graphics (UK) Ltd where Mr Mirab brought a claim for unfair dismissal claiming that the redundancy selection process was not fair because all alternatives had not been considered.

Mirab v Mentor Graphics (UK) Ltd

Mr Mirab was employed as Director of Sales for Mentor Graphics Corporation, a senior role in the company. He initially managed a team of 6; however, the sales division was subsequently divided into two and Mr Mirab then managed a team of 2. This made a significant difference to Mr Mirab’s responsibilities and he expressed his unhappiness to his line manager about what he saw as an effective demotion to an Account Manager, a role he was unwilling to accept.

It became clear that there was insufficient business opportunity for Mr Mirab’s division and growth objectives were not being met. The company concluded that the Sales Director role held by Mr Mirab was no longer required. They informed Mr Mirab via telephone that he was at risk of redundancy due to the need to reduce operating expenses but that there would be a period of consultation to consider ways to avoid redundancy.

Mr Mirab said that in his view the situation had been engineered and that he had been singled out and therefore his dismissal was unfair. This, he said, was partly due to disagreements with the head of the Division who was heavily involved in decision making, even to the point of deciding when to dismiss individual employees and supplying alternative reasons as to why they should be dismissed. They had had previous disagreements. The HR Business Partner sent Mr Mirab a link to worldwide vacancies within the company but Mr Mirab claimed none were suitable.

There were three consultation meetings in total and it was concluded that Mr Mirab’s role was redundant and no suitable alternatives existed. Mr Mirab appealed unsuccessfully. Mr Mirab suggested that he should have been pooled and scored against Account Managers outside of the UK but the company rejected this. The Company believed they only had to consider the UK position and that in any event, Mr Mirab had not been an Accounts Manager, he had been in the unique role of Sales Director.

Mr Mirab brought claims for unfair dismissal.

Decision  

The Employment Tribunal dismissed Mr Mirab’s claim of unfair dismissal. While it did accept that there had been some animosity between Mr Mirab and the head of the division and a slight superficiality to the internal process, it did not consider these matters relevant to the decision to divide Mr Mirab’s team and the ultimate dismissal.

It concluded that the company had done enough in considering alternatives to redundancy and had not specifically been required to consider ‘bumping’ another employee working as an Account Manager. In particular, Mr Mirab had given no sign that he would be willing to work as an Account Manager and had previously expressed his dissatisfaction at feeling like he was undertaking that role.

Mr Mirab appealed to the Employment Appeal Tribunal.

The EAT upheld part of Mr Mirab’s appeal.  The ET had reasoned that as a general rule, an employer is not required to consider ‘bumping’ unless it is raised by the employee. The EAT confirmed that this is not the case. Whether bumping should be considered will depend upon the particular circumstances of any redundancy. It is for the employer to consider whether bumping should be considered and for the ET to consider whether such decision falls within the range of reasonable responses available to.

The EAT sent the matter back to the ET to reconsider the fairness of the dismissal in light of the EAT’s judgment.

Comment

Employers must ensure that any redundancy selection process is fair. This means that there is a genuine redundancy situation and that a fair procedure is followed. A fair procedure will involve correctly identifying who should be at risk of redundancy, consulting the workforce and individuals, making reasonable efforts to find alternative employment elsewhere in the company and giving any dismissed employee’s the right to appeal. Employers should always consider all alternatives to redundancy, including bumping where appropriate, before the decision to dismiss is taken.

If you have any queries in relation to redundancy or any other HR queries please contact Joanne Holborn, Tom Scaife or Caroline Rayner on 01228 552600 or 01524 548494.

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