Redundancy was not a dismissal

When an employee is made redundant employers should if the employee has opted to be made redundant, as it may not mean the dismissal occured. In the case of Khan v HGS Global Ltd, the employment contract of an employee who had opted to take redundancy over relocating was found to have terminated by mutual consent and, as such, there had been no dismissal.

The employee worked for HGS Global.  His employment was due to transfer to another company under TUPE, however, this company was based some distance away.  In light of the extra travel time that would be involved in working for the new company, HGS Global gave the employee three options.  He could relocate, apply for alternative roles with HGS Global or opt for redundancy.  He opted for redundancy.

The employee subsequently sought to bring a claim for unfair dismissal, however, the Tribunal held that there had been no dismissal and that the contract had terminated by mutual consent (a decision upheld by the EAT on appeal).

The Tribunal was confident that the employee understood that he was being given a choice, that he had been repeatedly advised of his options (which were presented in a neutral way) and was not being pressurised or pushed in any particular direction.  In reaching its decision the Tribunal was also mindful that there would not have been any dismissals had the employees not opted for redundancy.

Further, the new company had not considered the extra distance to be ‘unreasonable’ and thus redundancy had only been offered by HGS Global as a result of employees’ concerns over the extra distance.

Tribunals will look at the reality of the situation to determine if an employee has been dismissed and that the label of redundancy will not always mean that a dismissal has occurred.

However, employers should approach the decision with caution as it is not intended to cover employees who volunteer for redundancy and the facts of this case are unlikely to be those which arise in the majority of redundancy situations.  It is also worth noting that the employee here could have sought to argue that the new journey time was a substantial change to his terms and conditions to his material detriment which, under TUPE, can amount to a dismissal.

Redundancy and reorganisation situations can be difficult for all those involved. Our employment solicitors offer clear and timely tailor-made advice to guide you through the process, contact our employment lawyers for further advice.