When a “pool of one” redundancy is unfair

A recent ruling from the Employment Appeal Tribunal shows why defining the group of staff at risk of redundancy too narrowly can result in an unfair dismissal.

As a general rule, it is up to an employer to establish the “pool” from which staff are to be selected for redundancy. That means that it is not necessarily unfair to proceed with a pool of one, as long as this is an approach a reasonable employer could take.

If there is a single occupant of a role that is to be discontinued – for example a bar steward in a small club – then it may be reasonable to have a single person in the pool, even though that makes the dismissal of that person almost inevitable. However in the latest case to rule on this issue, the EAT has overturned the decision of the employment tribunal that the dismissal had been fair, and substituted a finding of unfair dismissal.

The claimant, Mrs Mogane, was one of two Band 6 nurses working in a research unit at Bradford Teaching Hospital led by Professor Saralaya. a consultant physician researching new drugs to treat respiratory diseases, including COVID 19. Both nurses were engaged under a succession of fixed term contracts. Due to funding difficulties, Professor Saralaya decided to reduce the headcount in the unit by one. It was determined that Mrs Mogane was the only nurse to be put a risk of redundancy, because her fixed term contract was due for renewal before that of her colleague.

The employment tribunal reached the following conclusion:

It is right that there were no other alternatives considered but we are quite satisfied that that decision fell within the band of reasonable responses open to a reasonable employer. In situations where all relevant employees are on short-term contracts it is within the band of reasonable responses to take a decision based upon which of those is due for renewal at the particular point where there are perceived to be economical difficulties and where there is a diminution in the requirement for employees at that Band 6 level.

It is this element of the tribunal’s reasoning which was overturned on appeal. The main reason given by the EAT is that there was no meaningful consultation with Mrs Mogane before the pool was determined, a decision which made her redundancy inevitable. But it could equally have said that, where two employees are on fixed term contracts which have been renewed successively, it was arbitrary – at least in this case – to make the renewal dates determinative of the one who was to be made redundant.

There is a broader lesson to be taken from this case, about the legal effect of failing to renew a fixed term contract. It is not always appreciated that this is treated as a dismissal for unfair dismissal purposes. In many cases such a dismissal will be regarded as fair, but this cannot be assumed.