A recent decision by the Employment Appeal Tribunal (EAT) serves as a timely warning to employers, particularly small to medium-sized enterprises (SMEs), about the potential pitfalls of redundancy processes.
In Hendy Group Ltd v Kennedy [2024], a long-serving employee won his unfair dismissal claim despite accepting both the need for redundancies and the fairness of his selection. The issue? His employer failed to provide active support in finding a suitable alternative role within the company.
This case shows that ticking the right boxes isn’t enough. Even when redundancies are unavoidable, the way an employer handles redeployment can significantly impact the fairness of the overall process, with potentially costly consequences.
What happened in this case?
Mr Kennedy had worked for Hendy Group, a car dealership, for more than 30 years. During a restructuring triggered by the pandemic, his training role was placed at risk of redundancy. He accepted that redundancies were necessary and that he’d been fairly selected.
Although numerous internal vacancies existed during Mr Kennedy’s notice period, he argued that Hendy had failed in its duty to explore suitable alternative jobs within the business. The Employment Tribunal agreed – and when Hendy appealed, the EAT upheld that decision.
Despite several vacancies being available during his notice period, Mr Kennedy was treated like an external applicant. He was given no priority access or support. His access to the company’s intranet and email was cut off early on, and HR failed to inform hiring managers that he was at risk of redundancy. A senior manager even discouraged his applications, citing concerns about his motivation, despite clear evidence that he wanted to stay.
Ultimately, the Employment Tribunal found that Mr Kennedy had actively sought redeployment, but the company had not met its duty to help him. The result? Hendy was ordered to pay him £19,566.73 in compensation.
The legal principle
Under the Employment Rights Act 1996, even when redundancy is genuine and the selection process is fair, a dismissal can still be deemed unfair if the employer fails to take reasonable steps to consider suitable alternative employment.
The EAT’s decision reaffirms that employers must do more than signpost. They have a positive obligation to support staff in finding suitable alternative roles where these exist.
What employers can learn
For SMEs, especially those without large HR teams, redundancy processes can feel like a legal and logistical headache. This case illustrates that practical missteps can have unintended consequences.
Here are the key lessons:
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Support, don’t just inform
If you have other suitable jobs available, you need to help at-risk staff access them. That means more than pointing them to a list. Can they apply internally with priority? Are hiring managers aware of their status? Are they getting help to apply?
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Keep systems access in place
Cutting off access to emails, the staff intranet, or vacancy portals may be standard when someone leaves, but not when they’re still in the business and trying to apply for another role. Ensure staff can apply for roles before it’s too late.
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Considering redeployment is an essential part of the process
Thinking about alternative jobs shouldn’t be a bolt-on after the redundancy letter is sent. There should be meaningful discussions about redeployment during the consultation process.
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Be careful when judging motivation
Avoid assumptions about an employee’s commitment or mindset unless there’s strong evidence. Mr Kennedy’s case showed how easily an employer can be perceived as closing doors unfairly. Employment Tribunals are wary of subjective opinions being used to block someone from staying.
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Keep a clear record
Employers should be able to demonstrate the steps they took to help redeploy an individual. Were they sent internal vacancies? Were they given support? Was there evidence they applied and were considered? A paper trail matters especially where multiple vacancies exist.
What you should do now
If you’re managing a redundancy process – or think you might need to – now is a good time to review your internal approach. Ask yourself:
- Do we have a clear and fair process for identifying suitable alternative roles?
- Are HR and line managers actively supporting staff to stay in the business?
- Are we giving at-risk employees a genuine chance to redeploy?
- Can we show that we’ve done this in writing?
Redundancies are often unavoidable, but subsequent unfair dismissal claims – and the reputational and financial damage they bring – don’t have to be. This case is a sharp reminder that when it comes to redundancy, how you treat people on the way out matters just as much as why they’re going.
Read more:
Redundancy gone wrong: A case that reminds employers what not to do