Reduction of compensation to zero on the basis that redundancy dismissal was inevitable was incorrect
The Employment Appeal Tribunal (EAT) has held in Teixeira v Zaika Restaurant Ltd and anor that an employment tribunal was wrong to reduce unfair redundancy compensation to nil on the basis that the employee could have been placed in a selection pool of one and dismissed on the same date.
The claimant was one of ten chefs employed by Zaika Restaurant Ltd (ZR Ltd). He was the only "non-speciality" chef and had the least service. During the pandemic there was a significant reduction in work and the claimant was singled out for redundancy and given a month's notice of dismissal by telephone with no warning or consultation. The tribunal upheld his claim for unfair dismissal, but found that he could reasonably have been placed in a pool of one as he was the only non-speciality chef. This meant that the outcome would have been the same in any event and as redundancy would still have occurred when it did, the tribunal reduced the claimant's compensation to zero.
The EAT found that the possibility of a pool of one being fairly chosen did not mean that the dismissal was bound to have taken place when it did. The tribunal had failed to take into account the general requirement for some warning and consultation before making redundancies, even where a pool of selection of one might be chosen. Warning and consultation could have resulted in the selection of a pool of more than one, and might have affected the choice of any selection criteria. Even if dismissal was inevitable it could have been delayed to a certain extent which would have resulted in some additional compensation for the claimant. The matter was remitted to the same tribunal to consider what the outcome would have been had there been warning and consultation about the pool. If a pool of selection of more than one would have been chosen, the tribunal would need to consider what selection criterion would have been adopted and what would have been the outcome of their application. It would also need to consider how long any necessary consultation would have taken, even if the dismissal would ultimately have been inevitable.
Take note: The decision in Teixeira shows how important it is to consult when it comes to adopting a fair redundancy process even when it's likely that a pool of one will be chosen. Consultation may not affect the ultimate outcome, but it will go towards the fairness of any redundancy dismissal.