Are you looking to make redundancies in the recession? What about making just one person redundant?

Well, you’ve still got to follow the full process or else you could end up with an unfair dismissal claim on your hands.

The Employment Appeals Tribunal (EAT) recently decided that having a redundancy pool of one did not mean that dismissal was inevitable, and said that the employee should receive some compensation.

The case was Teixeira v Zaika Restaurant Ltd and another [2022] EAT 171 (2 December 2022)

Mr Teixeira was employed as one of a team of ten chefs in a London restaurant. He was the least experienced member of the team and the only non-specialist chef. The COVID-19 pandemic caused a reduction in work at the restaurant. In April 2020, the employer informed Mr Teixeira, without any warning or consultation, that he was redundant. He was the only chef selected for redundancy. He brought a claim for unfair dismissal.

The original employment tribunal held that Mr Teixeria’s dismissal was unfair due to not following a fair procedure.

When an unfair procedure is followed, the Tribunal usually consider a “Polkey reduction” – the name stems from a case, and a Polikey Reduction is a percentage reduction in compensation based upon an assessment of how likely the employee would have been dismissed had a fair procedure been followed.

The original tribunal ruled that if a fair procedure had been followed, he would have been placed in a redundancy pool of one, meaning there was a 100% chance that the redundancy would have occurred. His compensation was therefore reduced down by 100%.

The Chef appealed to the EAT.

The EAT held that the possibility of a pool of one being fairly chosen did not automatically mean that a dismissal was bound to happen. It said that the failure to give some warning and carry out a consultation was detrimental, because even in a small company, the consultation may have resulted in a larger selection pool which might have affected the choice of selection criteria.

The EAT’s view was that it could not be said that there was only ever one outcome – and the fact that it was considered by the Employer to be the only outcome despite not following process – shows that no fair process was considered.

Small business owners can learn from this decision.

If you are looking to make people redundant it is vital that a full and fair procedure is implemented. Steven can help with that. Alternatively, consider the use of a settlement agreement which can allow you to bypass the process but is usually a little more expensive as you have to legal fees and usually some extra compensation.