March 26, 2018

Who is Responsible for Raising the Possibility of ‘Bumping’ in a Redundancy Exercise?

The Employment Appeal Tribunal (EAT) – where disgruntled Claimants/Respondents turn if they wish to appeal an Employment Tribunal decision – has recently examined the issue of ‘bumping’ in redundancy exercises.

As EAT cases, and any propositions of law arising from them, are binding on future Employment Tribunal cases, it is worth examining the development.

‘Bumping’ can occur in a redundancy situation when an individual is dismissed from a role that is not redundant, so that somebody that would otherwise be dismissed because their role is redundant remains employed. Often this takes the form of a more junior employee being dismissed so that a more senior employee can be retained.

By way of example, Mr. Smith’s role as Sales Director becomes redundant, but Mr. Jones’s more junior role of Sales Manager is not redundant. Rather than dismissing Mr Smith, he is given the role of Sales Manager and Mr Jones is dismissed by reason of redundancy, having been ‘bumped’.

One can see how Mr. Jones would feel somewhat aggrieved at the prospect of being bumped out of a role that was not in itself at any risk of redundancy, but what about the reverse: when Smith is made redundant because Jones isn’t bumped?

Who should raise the possibility of bumping – employee or employer?

This was one of the questions raised in the recent case of Mirab v Mentor Graphics, heard at the Employment Appeal Tribunal (EAT).

In this case the employee’s role had become redundant and having looked at possible alternative vacancies (as an employer is obliged to do), the employee was dismissed.

Bumping did not happen in this case, and before the Employment Tribunal there was no evidence that the Employer had even considered it. When the employee claimed that the dismissal was unfair because (among other things) the employer hadn’t considered bumping, it is not difficult to imagine the employer’s response:

“Well, you never raised the issue of bumping, so why would we consider it?”

And indeed the Employment Judge agreed with this view, holding that the employer had not been required to consider the issue of bumping as it had not been raised by the employee. I believe most people would have some sympathy with this view.

However, on appeal, the EAT decided otherwise and held that the Tribunal Judge was wrong to conclude that an obligation to consider bumping only arose if the employee raised the issue, saying there is no rule in law to the effect that an employee had to raise the issue.

Perhaps in an effort to strike a balance, the EAT also went on to hold that there was also no rigid rule in law stating that if an employer fails to consider bumping then it will necessarily lead to an unfair dismissal.

What does this Judgement mean in practice for employers making redundancies and facing potential bumping scenarios?

As the EAT sees it, the issue is to be determined on a case-by-case basis. An employer needs show that they acted within a range of reasonable responses on the bumping issue, along with all other issues connected with a redundancy dismissal.

it would be sensible for an employer to be able to demonstrate that they have at the very least addressed their mind(s) to the question of bumping, even if the employee hasn’t raised it

In practice, this Judgement means it would be sensible for an employer to be able to demonstrate that they have, at the very least, addressed their mind(s) to the question of bumping in any such redundancy process – even if the employee hasn’t raised it.

This should eliminate the potential for any perceived unfairness.

It should also be borne in mind that any duty related to bumping arising in a particular set of circumstances would be to consider bumping as part of the larger process, not a duty to actually ‘bump’ an employee.

Employers can insulate themselves from any risk around bumping by building these considerations into their redundancy approach

Provided there are sensible and reasonable grounds for not choosing to do so (and there are many of these), establishing that due consideration was given to the issue – as part of the larger process – should go a long way to insulating employers from any potential uncertainty brought on by the decision in Mirab v Mentor Graphics.

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About the author

Stuart Morley

About the author

Stuart Morley

Having completed degrees In Law, Criminal Justice and Federal Politics, Stuart finished his training at Manchester Metropolitan University in 2003. He was then awarded a scholar's bursary from the Honorable Society of the Inner Temple in October 2003 and called to the Bar of England and Wales. Stuart's experience handling hundreds of cases enables him to identify risk efficiently, working closely with Moorepay's advice service to place our clients in strong positions should they ever be sued. At Moorepay, Stuart has practiced exclusively in Employment Law, representing employers regularly in Tribunals across the UK in cases covering Wages, Breach of Contract, Unfair Dismissal, Discrimination, Transfer of Undertakings, Whistleblowing, Working Time and many others.

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