Veitch Penny LLP - Exeter | Crediton, Devon

Case

Glasgow City Council v Deans & Others
Employment Appeal Tribunal - 16 August 2006

Issues

(1) Reason for redundancy
(2) Redundancy procedures
(3) Business re-organisations

Facts

Mr Deans, Mr Mulrine and Mr McClenaghan were employed by Glasgow City Council as centre supervisors as part of its cultural and leisure services department. In November 2000, the council published an action plan called "Action Plan for Change" which recommended the re-organisation of current staffing structures to improve the efficiency of its services. Following numerous consultation meetings with the trade unions, it was decided that 96 posts including the centre supervisors would be ‘deleted' and 131 new posts would be created. The staff in deleted posts were asked to apply for the new positions. The Claimants applied for one of the new posts of ‘community facility officer'. The position was paid at a higher grade and incurred greater responsibilities. The Council rejected their applications and offered them the alternative position of ‘culture and leisure attendant'. The Council argued that it was a similar position to their current roles although had a less remunerative salary. The Claimants rejected the offer.

In December 2002, the council wrote to the Claimants advising that their positions were being terminated on grounds of redundancy. The Claimants were offered the chance to work in the new positions for a 4 week trial but declined to do so. They were given assistance with finding alternative positions etc. Eventually their employment was terminated.

The Claimants made claims of unfair dismissal and sought orders for re-engagement. The Council admitted that the Claimants had been dismissed but argued that they had been dismissed for ‘some other substantial reason of a kind such as to justify a dismissal of an employee' and that the dismissal for that reason was fair. Alternatively they argued that if the dismissals were for redundancy, they had carried out their consultation obligations by consulting with the relevant unions.

The Tribunal found that the dismissals were for a potentially fair reason because the re-organisation constituted ‘some other substantial reason' rather than redundancy. Whilst it had been shown that the reorganisation of the Council was essential, it concluded that the Council had not acted reasonably in carrying out the dismissals. They were not satisfied that the cultural and leisure services section was under ‘real pressure' to carry out the re-organisation and that there had been no evidence to show that other options had been explored or considered before dismissing the Claimant. The Tribunal felt that a reasonable employer would have done more to find alternative employment for the employees and that the posts offered to them were not within the range of offers which a reasonable employer would make. The Council appealed to the Employment Appeal Tribunal (EAT).

Decision

The EAT allowed the Appeal referring the case back to a freshly constituted Tribunal. The Tribunal were asked to consider whether the dismissals were fair by carrying out a proper balancing act between the employer and the employee.

The EAT stressed the importance of undertaking a balancing act to take into account the interests of both employer and employee in the re-organisation. In this case, the Tribunal had wholly failed to adopt this test. It did not consider the benefits to the Council of the re-organisation balanced against the consequences for the employee.

Comments

It was quite clear that a business re-organisation that satisfies the ‘some other substantial reason' test is bound to involve some benefit to the employer. This benefit must not be ignored by a Tribunal when considering whether a re-organisation dismissal is fair or not.

Rachel Billen - Associate Solicitor, Commercial Department at Veitch Penny.
Tel: 01392 278381, Fax: 01392 410247, Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

This Employment Law Update does not constitute legal or other professional advice and should not be relied on as such. You should take specific advice regarding your circumstances before taking any action based on the information contained within this Update.