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Redundancy and Bumping

An example of ‘bumping’ is when Jo Blogg’s position is redundant, but you ‘bump’ out John Smith from another job, make him redundant instead and slot Jo Bloggs into the position formerly occupied by John Smith.

 

Another example is when all the staff in a particular team or department are put at risk of redundancy, and then have to compete for the remaining jobs within the department.

 

This may seem unfair to the poor guy bumped out of a job but in more than one reported case including  Lionel Leventhal Ltd v North in the Employment Appeals Tribunal in 2005, it was expressly approved.

 

In Lionel Leventhal Ltd v North, Mr North was the company’s most expensive employee and was selected for redundancy as a cost saving measure, without considering making any other member of staff redundant. N produced a list of cost-cutting suggestions that did not involve compulsory redundancies. However, L Ltd decided that these suggestions were not practical and confirmed N’s redundancy on 23 September 2003.

 

The EAT took the view that the company had not given proper consideration to making an alternative position available to Mr North N by making another employee redundant, either voluntarily or compulsorily. It can be unfair for an employer to fail to consider offering alternative employment to a potentially redundant employee, even in the absence of a vacancy. The Tribunal should consider whether or not there is a vacancy; how different the two jobs are; the difference in remuneration between them; the relative length of service of the two employees; the qualifications of the employee in danger of redundancy; and any other relevant factors which may apply in a particular case.

 

The EAT held that there was no ‘hard and fast rule’ that an employee willing to accept a subordinate position should take the initiative in discussions with management. Mr North’s silence with regard to his willingness to accept a subordinate position did not necessarily provide the company with a defence to the unfair dismissal allegation.

 

It’s worth noting however that this case does not establish that an employer must consider bumping to avoid a finding of unfair dismissal. As the EAT points out, the fairness of a failure to consider bumping will depend on the circumstances.

 

In Dixon v The Automobile Association Ltd, EAT 2004 the Judge stated “In an ordinary redundancy case the employer is under no obligation to bump an employee from an existing job outside the pool in order for the redundancy to be fair”.

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