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Employment Law Case Update: Fair Redundancy and Internal Candidates

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We are regularly hearing of redundancies in the news in the aftermath of the coronavirus pandemic, and it is vital that should you be considering making redundancies in your business, you carry out the process fairly and without bias.  A recent legal case has highlighted why this is so important in the case of Larkin v Liz Earle Beauty Limited.

Mrs Larkin had worked for Liz Earle Beauty for five years before her redundancy in May 2018.

In January 2018 Julie Slaymaker was hired as consultant to help the company refocus its digital marketing. Meeting in the February to discuss Ms Slaymaker’s plans for the email channel, Ms Slaymaker had spoken of future opportunities for Mrs Larkin and said they would speak again soon. It was, Mrs Larkin told the Employment Tribunal, a positive meeting.

Later that month Mrs Larkin’s line manager, Katy Johnson, informed Ms Slaymaker that Mrs Larkin was pregnant. Mrs Larkin claims that Ms Slaymaker then “lost interest” in her. The ET heard that Ms Slaymaker never followed up after their initial meeting, despite the fact that Ms Johnson had recently given Mrs Larkin a glowing employee evaluation.

Ms Johnson resigned on 19 March 2018 but was told by Ms Slaymaker not to tell her team she was leaving. By this time, Ms Slaymaker had made plans to restructure the business, making Mrs Larkin’s position – along with three others – redundant.  The manager position vacated by Ms Johnson now needed to be filled but Mrs Larkin didn’t get the opportunity to apply; the ET saw no evidence that internal candidates were considered. Instead, on May 17, Ms Slaymaker appointed someone external, with whom she had worked before. Mrs Larkin did not have a redundancy meeting until 30 May.

The ET found the redundancy process unfair.  At the time the manager vacancy was being filled, the Company knew “that [Mrs Larkin’s] post was earmarked for redundancy along with others, that she was pregnant, and ought to have known that she had skills and abilities which may well make her a suitable fit for the post.” It rejected the Company’s assertion that it had considered Mrs Larkin’s (or anyone else’s) skills to fill the manager vacancy. Instead, the ET found that the Company hid the vacancy from Mrs Larkin and others until it was filled by someone “not pregnant and not about to go on maternity leave”. The Company also failed to inform Mrs Larkin she was facing redundancy until after the manager vacancy had been filled, when she could no longer ask to be considered for it.

The ET concluded that Ms Slaymaker’s view of Mrs Larkin changed after learning of her pregnancy. In a meeting after the restructuring announcement, when Mrs Larkin expressed her desire to stay with the Company, Ms Slaymaker suggested she would enjoy maternity leave before eventually finding another company to work for. She advised her not to be stressed about redundancy and to put her baby first. The ET found this “indicative of the thinking of Julie Slaymaker” - that Mrs Larkin would not be returning after maternity leave and “should be enjoying motherhood, rather than working”. Thus, the ET concluded that Ms Slaymaker’s consultation and decision making process was prejudiced by Mrs Larkin’s maternity and pregnancy.

The ET found the redundancy process both unfair and discriminatory “on grounds of pregnancy both in the failure to consider the claimant for the vacant managerial position and in the treatment of the claimant’s subsequent consultation process and respect of her dismissal”.

The ET awarded Mrs Larkin £17,303.20 - £10,000 for hurt feelings, £2418.28 for past losses, and £4884.92 for future losses.

This case illustrates how following a clear and fair redundancy process can help minimise the risk of discrimination claims. In a fair process, the employer should give current employees the opportunity to apply for a vacancy, and seriously consider internal candidates for the role.

If you have any questions regarding this article, you can call our Employment team today on 023 8071 7717 or email employment@warnergoodman.co.uk.

This was previously part of our weekly Employment Law Newsletter. If you would like to subscribe, please email us at events@warnergoodman.co.uk or just fill in our subscription form.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.