Can an employee still make a claim for unfair dismissal even if they opted to take voluntary redundancy?

The facts

Ms White started working for HC-One Oval Limited (“HC”) in 2013 as a part-time receptionist.  In 2017, Ms White was carrying out additional administrative duties on top of her normal secretarial role in order to provide cover for a colleague who was absent through sickness, with no additional pay.  Ms White raised a grievance relating to the fact she had not been paid for the extra work, though the grievance was dismissed.

In June 2018, a new full-time receptionist was employed.

A few months later HC announced that it was seeking to reduce the number of employees working in receptionist and administrative roles and a redundancy process was started.  Ms White was provisionally selected for redundancy alongside other employees, though she later decided to opt for voluntary redundancy which was accepted by HC.

Following her dismissal by reason of redundancy, Ms White claimed she had been unfairly dismissed as she alleged HC had failed to follow a fair redundancy process.  In particular, Ms White alleged the redundancy was a sham as HC had taken on a new full-time receptionist who would carry out both receptionist and administrative work and that HC wanted to replace her as a part time worker with a full-time employee.  Ms White also alleged that the decision to make her role redundant was linked to her previous grievance.

HC disputed Ms White’s claims, in particular referring to the facts that she had rejected a suitable alternative role that was offered to her during the redundancy consultation process and that ultimately she had opted to take voluntary redundancy.  In the circumstances, HC argued that Ms White had been fairly dismissed and stated her claim should be dismissed as it lacked prospects of success. 

 

The Employment Tribunals ruling

At first instance the Employment Tribunal (“ET”) found in favour of HC, stating her claim had no reasonable prospects of success and that it was fundamentally flawed.

Ms White appealed to the EAT.

 

The Employment Appeal Tribunal's decision

The EAT ruled that when an employee accepts an offer of voluntary redundancy they are agreeing that they will be dismissed for the reason of redundancy, they are not resigning and can still pursue a claim for unfair dismissal. 

Additionally, the EAT stated that the ET should still have examined whether the redundancy process was fair, regardless of the circumstances surrounding the redundancy.  The EAT confirmed that the “fact that Ms White had requested voluntary redundancy did not mean that her complaints about the process that had led her to make that request were irrelevant; a claim of unfair dismissal in these circumstances cannot be assumed to be ‘fundamentally flawed’.”.

The appeal was allowed and the claim has been remitted back to the ET for a full re-hearing.

 

The outcome for employers

Ms White’s case confirms that even where an employee opts to take voluntary redundancy, they can still pursue an unfair dismissal claim.  In order to avoid the risk of such claims employers should ensure they have a well drafted redundancy policy, that their managers are trained in handling redundancies and that the redundancy process is conducted fairly for all a employees who’s roles are at risk of redundancy.

Had the parties signed a settlement agreement with an appropriate waiver, the employer could have avoided the cost and expense of this litigation.  As a practice point, employers should consider the use of settlement agreements where an employee leaves in contentious circumstances, especially where any sums are paid to the employee over and above any statutory or contractual amounts due; in most cases, the agreement will effectively bar any further legal claims.