TRANSFERRED REDUNDANCY

14 August 2018

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Transferred redundancy also known as bumping occurs when an employee is dismissed, as their job is taken over by another staff member who was originally made redundant.

The discussion surrounding transferred redundancy is problematic for employers, as there is evident uncertainty regarding whether or not bumping should be discussed with employees during a redundancy consultation, and whether or not the employer or the employee is the first to it up in conversation, there is not actually a legitimate set of language that is currently in place for such discussion.

In the case of Mirab v Mentor Graphics (UK) Ltd, the Employment Tribunal concluded that as the claimant employee did not discuss the idea of bumping or taking on a new role, they decided in favour of the employer.

However, the Employment Appeal Tribunal criticised this decision, with the argument that the Employment Tribunal’s assumption that there was a general rule regarding bumping was an incorrect judgment. As currently there is not an official rule to determine whether an employer must consider bumping in the redundancy process.

In this case, the Employment Tribunal believed that it was a fair dismissal, as the employee did not state his intentions regarding an interest in a new role within the company, which would be achieved by transferring the redundancy to another employee.

Although the Employment Appeal Tribunal established that when before considering redundancy an employer should first consider looking at existing potential vacancies within the organisation, or in some cases considering the replacement of another employee if necessary.

This should be discussed in the consultation process by asking an employee if they would be interested in a a different role, which would probably result in reduced pay. If the employee is not interested, then the redundancy should then go ahead as normal.

In some cases, an employee may ask about existing roles that they take over, this should also be taken in to consideration during the redundancy process, taking in to consideration various factors such as:

Are there any vacancies?

How different are the jobs?

How different is the remuneration?

How different is the length of service?

Does the employee have the relevant qualifications?

All of these factors should be considered before consulting with the employee regarding either redundancy or job transition, and in the case of the latter, if it involves transferred redundancy, a thorough consultation must occur with the employee who you plan to replace and possibly make redundant.