Today's EAT review concerns the case of Reid v M J Flood Technology Limited (UD205/2010). Amongst other things, the case involves third party pressure to dismiss and whether the name should be revealed to the court.

Case Name: Reid v M J Flood Technology Limited (UD205/2010)

Legislation: Unfair Dismissals Acts 1977-2007; Redundancy Payments Acts 1967-2007

Jurisdictions/Subject Matter: Redundancy, Unfair Dismissal, Interference of Third Party


Facts

The claimant commenced employment as a sales manager with the respondent, in July 2006. The claimant’s role was maintaining sales with existing customers, and seeking new business sales. The respondent company provided IT solutions to companies on a contract basis. The respondent business was experiencing financial difficulties, with a significant decrease in business of 33%. As a direct result of this all sales and professional services decreased.

On 12 June 2009, the sales team was made aware of the prospect of imminent redundancies. The claimant was informed on 15 June 2009 that he was being made redundant. The respondent claimed Mr. Reid was selected for redundancy as he was the only one performing the role which was made redundant. Mr. Reid managed contracts and the contracts renewal: as the contracts had declined, this full-time role was no longer necessary. In total, four staff members were made redundant by the respondent.

The claimant alleged that the respondent retained two comparable employees. The employer claimed that the two existing employees had higher technical skills. The claimant worked in conjunction with a consultant whilst working on projects with high technical specifications. Mr. Reid alleged that this was commonplace with all sales staff.

A complainant alleged he was made redundant, along with the complainant, and rehired three months later by the respondent. The respondent rehired this individual, on a secondment basis, as part of a contract agreed with a service user. The claimant was also put forward for the role by the respondent, as an alternative to redundancy. The service user had the right as part of the contract to veto the prospective staff member. The service user exercised his right to veto the claimant.

The claimant asserted that he was unfairly dismissed because of the following factors:

* There was no genuine redundancy situation OR
* If there was a genuine redundancy situation, he was unfairly selected for redundancy.


Determination

All claims under the Unfair Dismissals Acts, 1977 – 2007 and Redundancy Payments Acts, 1967 – 2007 were dismissed. The Tribunal found that there was a genuine redundancy situation. This was evidenced by the fact that the claimant was not replaced. The duties which the claimant would have normally undertaken had been distributed across the sales team.

The Tribunal then examined the issue of whether Mr. Reid was unfairly selected for redundancy. The respondent’s evidence was accepted that Mr. Reid’s technical skills were not as highly developed as the two existing employees. The Tribunal followed guidance from Charleton J. in JVC Europe Limited v Jerome Ponisi [2012] 23 E.L.R. 70 that the “mark of genuine redundancy” is that the employer considers the alternatives. The respondent attempted to place the claimant with one of the company’s service users. Furthermore, the respondents considered other options such as re-training and lay-off. The Tribunal found that the respondent company acted reasonably in the circumstances and had considered all other reasonable alternatives.

The contentious issue as to whether there was third party interference in the redundancy was then examined. The respondent was reluctant to publicly name the service user or put a representative from this third party into evidence. The respondent stated that it might have commercial repercussions for the company. The Tribunal reluctantly accepted this explanation and determinations from the Tribunal do not identify the service user. It was determinative in this case that the service user had no input in the original redundancy decision. The service user merely exercised his contractual right to veto the prospective employment of Mr. Reid.


Legal Review

This case shows the importance for the employer of ensuring that they act fairly in the selection of each individual employee for redundancy. The criteria used to assess employees should be reasonable and applied to all concerned employees.

This case gives a clear example of how the Tribunal will approach cases where third party interference is alleged. The third party interference did not impact the decision to make the claimant redundant; however it acted as a veto against his re-employment. In these circumstances, the Tribunal concluded that it was not necessary to publicly name the third party or require a representative of that party to provide evidence.

Full case decision:
http://bit.ly/JZensD