The EAT has confirmed in Teixeira v Zaika Restaurant Ltd that the rule that employers must consult with their employees before dismissing them on the ground of redundancy applies even if the employer is very small and there is a “pool of one”. Although such redundancy dismissals may seem like the only possible outcome, they might be delayed by consultation or result in additional compensation for the claimant.
Mr Teixeira started work for Zaika restaurant in August 2015 as a tandoor chef in a team of ten other chefs. They all had much longer service than him and the other tandoor chef on the team was also much more senior than him. Although Mr Teixeira helped out in all the different sections, he could not run any of them.
On 1 April 2020, his employer rang him to tell him that that he was being dismissed by reason of redundancy because of a very significant reduction in work as a result of the coronavirus (Covid-19) pandemic. The restaurant accepted that it had not followed any procedure and his dismissal was, therefore, unfair.
The tribunal judge held that as Mr Teixeira was the only non-speciality chef, he was effectively in a pool of one. However, even if he had been placed in a pool with all the other chefs, he would have scored the fewest points.
So, although the restaurant owner had failed to follow any procedure when conducting the redundancy exercise, the judge was 100 per cent certain that even if he had, the outcome would have been the same. The timetable would also have been the same, in that Mr Teixeira would have been given one month’s notice on 1 April. On that basis, the judge reduced his compensatory award to zero.
Mr Teixeira appealed on three grounds. Firstly, that the tribunal was wrong to decide that it was inevitable that he would have been fairly dismissed had his former employer followed a fair procedure; secondly, that it was perverse to hold that he was in a pool of one; and thirdly, it was perverse to decide that even if he had been in a pool with the other chefs, he would inevitably have scored the fewest points.
Upholding the appeal on all three grounds, the EAT found that the judge was wrong to conclude that redundancy was the only possible outcome. Apart from anything else, she had not addressed the fact that his former employer had failed to give Mr Teixeira any warning and had completely failed to engage in any consultation, a legal requirement that applied even in the case of a small employer.
If she thought that dismissal was fair despite the lack of consultation, then she needed to explain how that was the case with reference to the relevant law. For instance, she should have considered the recent decision in Mogane v Bradford Teaching Hospitals NHS Foundation Trust (see weekly LELR 798) in which the EAT held that it was not fair to dismiss an employee who was in a pool of one and selected for redundancy without any prior consultation.
Had the employer in this case given some warning and consulted with Mr Teixeira, the EAT held that they might have adopted different selection criteria which meant that more people ended up in the pool. Further, even if dismissal would still have been inevitable, it might have been delayed to some extent by consultation or result in additional compensation for the claimant.
The EAT remitted the case to the same tribunal to reconsider what the outcome would have been had the employer given Mr Teixeira advance warning and engaged in genuine consultation about who should be in the pool.
It is said that Victorian tunnels had corners to prevent horses bolting towards the light at the end of them and causing damage in the process. In “pool of one” cases employers sometimes bolt off towards the perceived endpoint, and this decision aims to avoid the damage which that type of tunnel-vision can sometimes inflict.
One aim of consultation is to see whether there is a better way of proceeding. It might be that this is just not possible, but sometimes it is. The point is that you do not know if you do not ask. If both outcome and timetable are inevitable then so be it. If they are not, then the employee may still be able to delay the inevitable or, if they are very lucky, avoid it entirely. Denying them that chance to find out is unfair, even when they are the only one in the pool and there seems little cause for optimism.
But this approach also has another benefit. As the EAT says here, requiring the proper procedure in “pool of one” cases is an important “worldly-wise” protection against sham redundancies which target an unwanted employee.
It is, therefore, not the empty exercise in box-ticking that it might otherwise appear to be.