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Redundancy Bumping & Fair Dismissal

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When dealing with redundancies, employers have to meet specific requirements to ensure the fair and lawful dismissal of employees. This includes having a genuine reason for any redundancy and following the correct redundancy procedure.

Redundancy bumping is a specific and complex aspect of the redundancy process, which employers should give full consideration to when making employees redundant to avoid allegations of unfair dismissal.

 

What is redundancy bumping?

As part of a fair redundancy process, an employer should generally consider whether or not it can offer an ‘at risk’ employee suitable alternative employment.

This can include any vacant roles within their company or organisation and can extend to considering roles that are not vacant, as well as those that are.

Where the alternative role is not vacant, but rather already filled by another member of staff, this is referred to as ‘redundancy bumping’.

A bumped redundancy therefore refers to when an employee whose role is not at risk of redundancy is dismissed as redundant and where the resulting vacancy created by their dismissal is filled by the employee whose role was originally redundant.

This still qualifies as a redundancy dismissal, even if there is no actual or anticipated cessation or diminution in the requirement for someone to do the work undertaken by the employee being dismissed.

By linking a dismissal to a diminution in the need for employees, a redundancy situation arises for the bumped employee, even though it may not be a diminution in the work that the dismissed employee was required to carry out.

 

Is redundancy bumping lawful?

Redundancy bumping, despite the potential injustice to the employee who is ultimately dismissed by reason of redundancy, is lawful provided the correct procedure is followed in respect of the bumped employee’s dismissal.

The process of moving a potentially redundant employee into another role that is already filled is a well-established process, and accepted by both the courts and tribunals.

This means that, in certain circumstances, dismissal on the grounds of redundancy is not strictly limited to where there has been a cessation or diminution of the work carried out by the dismissed employee. Instead, a genuine redundancy situation can still arise where there has been a diminution in the need for the same number of employees.

That said, it must be the transfer or redeployment of the notionally redundant employee into the role of another employee – who is not otherwise at risk of redundancy – that causes the bumped employee to lose their job.

For example, where the bumped employee is made redundant because of misconduct or poor performance, albeit where another employee is offered this role as an alternative to redundancy, this will not constitute a true ‘bumping’ scenario. The employee originally at risk of redundancy has simply filled a vacancy that has arisen independently of the redundancy situation.

 

Fair use of redundancy bumping 

At first blush, redundancy bumping can appear to be an unjust process, especially since it results in the dismissal of someone whose job role is not actually redundant. However, in legal terms, this can constitute fair grounds for redundancy. Further, in cases where an employer fails to consider bumping of employees, this may, in itself, constitute unfair dismissal.

In Mirab v Mentor Graphics (UK) Ltd [2018], the Employment Appeal Tribunal (EAT) examined the question of whether or not employers are always required to give consideration to the option of bumping.

Mr Mirab brought an unfair dismissal claim on the ground that his employer, Mentor Graphics, had not considered all available alternative options to redundancy. On appeal to the EAT, it was ruled that the employer’s failure to consider bumping a more junior employee to allow for a more senior member of staff in a redundancy situation to take the role will not render the dismissal of the senior employee ‘automatically’ unfair.

The principle set by the EAT is that there is no strict requirement on an employer to consider bumping its employees in order to dismiss fairly in every redundancy case, nor is the employer under a positive obligation to dismiss another employee to preserve the employment of another member of staff.

Instead, the fairness of any dismissal will depend entirely upon the circumstances in each case, where consideration of redundancy bumping is just one factor in determining fairness, but is not determinative of that question by its presence or absence.

The redundancy is to be judged by what a reasonable employer would do in the particular circumstances of the case, where the actions of the employer will only be classed as unfair where these fall outside the band of reasonable responses.

The case of Mirab endorses the earlier decision in Lionel Leventhal Ltd v North [2004], where the EAT found that in circumstances where there had been no consideration of alternative employment in a subordinate capacity, the determination of whether a redundancy dismissal was fair or unfair would be a matter of fact.

 

Redundancy bumping risks 

It is clear from the decision in Mirab that there is no general rule that for a redundancy dismissal to be fair, an employer is obliged to consider bumping on a pro-active basis, i.e. without the employee even raising it. Equally, however, there is no requirement on an employee to raise the possibility of bumping before an employer has to consider it. Each case will turn on its own facts.

That said, in Mirab the EAT did go on to suggest that as a matter of best practice, employers should consider bumping as a possible option in all cases. This means that employers should always explore the possibility of redeploying employees into roles that are already filled, regardless of whether or not this possibility has first been raised by an employee at risk of redundancy.

It is not usually appropriate for it to be left to the employee or any trade union representative to raise redundancy bumping. In many cases, employees may be resistant to redeployment, especially where this involves a more junior replacement role or a pay cut, but this should not dissuade an employer from considering all alternative options in a redundancy situation.

It is also important to remember that it may not be sufficient to simply consider the possibility of redundancy bumping. To avoid a finding of unfair dismissal, you must also consult with the employee to explore whether they would be willing to consider a more junior role at a reduced salary.

 

Should the selection pool for redundancy be extended?

In the case of Fulcrum Pharma (Europe) Ltd v Bonassera and Another [2010] the EAT upheld the tribunal’s finding of unfair dismissal on the basis that the employer failed to consider whether the one remaining and more junior employee in the HR department should be included in the pool for redundancy selection.

The EAT listed a number of factors to be taken into consideration in determining if subordinate employees should be included in the redundancy selection pool, such as:

  • Whether or not there is a vacancy
  • How different the two jobs are
  • The difference in remuneration between them
  • The relative length of service between the two employees
  • The qualifications held by the employee at risk of redundancy
  • Any other factors applicable to the particular case

In practice, this means you may need to consider widening your pool for selection for redundancy, both horizontally due to an overlap in duties, as well as vertically due to the possibility of bumping.

Where subordinate employees are not included within the selection pool, you must still consider all forms of alternative employment for employees at risk of redundancy, including roles that are already filled by other members of staff.

How to manage redundancy bumping

The possibility of redeploying a redundant employee into another employee’s role should not only be part of your general consideration of the alternatives to redundancy that may be available, but also part of your consultation process.

When discussing ways in which compulsory redundancy can be avoided with an employee, you must never dismiss redundancy bumping out of hand based on any assumptions that this idea would be rejected.

If confronted with the possibility of losing their jobs altogether, many employees may become more flexible in their approach to alternative options, even where this involves accepting an alternative subordinate or lesser paid role.

Further, an employee who has previously expressed any resistance to redundancy bumping, may still seek to use the absence of any offer of alternative suitable employment in support of a claim for unfair dismissal.

This means that it is also important that a paper trail is kept to demonstrate that redundancy bumping was considered, and that the employee was consulted, even if it is concluded that this would not be appropriate in the circumstances.

If you get redundancy bumping wrong, either by failing to include subordinate employees in the selection pool, or by otherwise failing to consider or consult with employees about the possibility of alternative subordinate employment, you may be at risk of a claim for unfair dismissal.

Equally, however, the employee who has been bumped will also have a potential claim for unfair dismissal in circumstances where improper or no consideration has been given as to whether this is a fair decision, based on whether all parts of the dismissal process satisfied the range of reasonable responses test.

This means that when faced with a compulsory redundancy situation, employers should always endeavour to follow a full and fair consultation process for everyone involved. Where you wish to utilise the option of redundancy bumping in order to retain valued and more senior employees, full consideration should be given to the reasons for proceeding in this way.

These reasons should be clearly documented so that, in the event of a claim for unfair dismissal, you have a clear account of your decision making process and the reasons for this.

 

Need assistance?

DavidsonMorris’ employment lawyers can help with all aspects of workforce management and planning, including how to handle redundancies in a way that mitigates legal risk. Working closely with our specialists in HR, we provide comprehensive advice on the options open to you as an employer and practical support through the redundancy process. For help and advice, speak to our experts.

Redundancy bumping FAQs

What does bumping mean in redundancy?

Bumping in redundancy relates to the process whereby an employee whose role is at risk of redundancy is redeployed into an alternative role, and the individual who previously undertook that role is dismissed as redundant instead.

What does 'subject to bumping' mean?

'Subject to bumping' means that the employee currently performing a particular job role may be displaced by another employee, where there is a diminution in the need for employees, rather than a cessation or diminution in the requirement for someone to do the work undertaken by the employee being redundant.

What are bumping rights?

These are rights of an employee whose job role has become redundant to replace another, less senior employee in a role for which they are both qualified. This system of reassigning jobs is typically based on seniority, and commonly used in the US, rather than the UK, where there is no strict legal requirement to consider redundancy bumping.

How does bumping work in a union?

In the US, there are commonly contractual bumping rights, where a senior employee is entitled to replace a less senior employee in a particular job role for which both employees are qualified. The employer and a union representative will typically negotiate the terms and conditions of workers' employment, which usually includes provisions in respect of bumping rights.

Last updated: 24 June 2020

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