The EAT handed down judgment in Teixeira v Zaika Restaurant Limited & ors  EAT 171 on 2 December 2022.
HHJ Tayler held that the Tribunal had erred in reducing the claimant’s compensatory award to zero on the basis the Respondent could reasonably have decided on a selection pool of one. The judgment provides a helpful summary of the law on the requirements of a fair procedure in the redundancy process, particularly for small employers.
The Claimant was employed as a tandoor chef at Zaika Restaurant in London. He was dismissed in early April 2020 when the Covid-19 pandemic caused restaurants to temporarily close. There were a total of ten chefs at Zaika Restaurant. The Claimant was the only one to be dismissed, while the remaining chefs were furloughed. The restaurant subsequently reopened.
There was no real dispute that the reason for the dismissal was redundancy. The Respondent also accepted that it did not operate any procedure before the Claimant was dismissed, and therefore that his dismissal was unfair, at least procedurally.
The Employment Tribunal identified that it had to decide “whether, and if so, when” the claimant “would have been dismissed had a fair procedure been followed”. The Tribunal’s finding on this was that “given that I have accepted that the [Claimant] could reasonably have been placed in a pool of one had Mr Dhaliwal put his mind to it, I consider that the redundancy would still have occurred when it did.”
The Claimant appealed on the basis that the Tribunal erred in law in its approach to determining that there was a 100% chance that the claimant would have been fairly dismissed at the same time as his actual dismissal had a fair process been followed. In particular, the appeal challenged the conclusion that because the claimant could reasonably have been put in a pool of one, he would have been dismissed when he was.
The Claimant also appealed the Tribunal’s findings that he could reasonably have been put in a pool of one and, had he been pooled with the other chefs, “the irresistible conclusion is that the [Claimant] would have been the lowest scorer”.
Helpful summary of the law
HHJ Tayler’s judgment provides a helpful summary of the law in relation to the fair procedure to be undertaken in redundancy cases, particularly for small employers where no union is involved. In particular, the EAT accepted the appellant’s arguments on the law, and the judgment highlights the following:
“An award consisting only of a redundancy payment would generally only be appropriate where there was a 100% chance that if a fair process had been applied the employee would have been fairly dismissed on the same date as the unfair dismissal took place. If a fair procedure would have taken some time there would be some compensation to cover the period that the consultation would have taken even if dismissal was inevitable.”
“the employment tribunal has to recreate the world as it would have been for the employer and employee had a fair procedure been applied…
While the determination necessarily involves a degree of speculation, it must be based on evidence. The assessment is what the employer would have done if it had acted fairly, not what some other hypothetical fair employer would have done. The evidence should be considered with some circumspection, as a learning of experience is that employers are almost always adamant that dismissal was inevitable, while employees are equally certain that a fair procedure would have resulted in their retention in employment.”
“Warning and consultation are generally necessary components of a fair redundancy procedure” (citing the conclusions of the EAT in Williams and others v Compare Maxam Ltd  ICR 156 at 162, in the context of unionised workplaces)
The process should generally start with some warning. In Williams two potential reasons for warning employees who are at risk of being dismissed by reason of redundancy were identified: the first to ensure that effective consultation can take place, including about the possibility of alternative work with the employer, and the second to give employees an opportunity to seek alternative employment with another employer. The importance of the former was consider in Elkouil v Coney Island Ltd  IRLR 174 at :
‘The warning, the giving notice of risk, that is spoken of there is an essential prerequisite of the consultation process, because without it the representatives of the employee will not be able to formulate a strategy or consider what suggestions they can put to the employer. In this case it is true that a single person was being made redundant and no union was involved, but the principles are exactly the same.’
…some consultation will generally be required even for very small employers: De Grasse v Stockwell Tools Ltd  IRLR 269 at :
‘In our judgment while the size of the undertaking may affect the nature or formality of the consultation process, it cannot excuse the lack of any consultation at all. However informal the consultation may be, it should ordinarily take place.’
‘there is good reason to examine a decision to choose a pool of one employee with worldly-wise care.’
Anna Dannreuther represented the successful appellant at all stages of the litigation, including drafting the grounds of appeal.
William Meade (Senior Clerk)