Hendy Group Ltd v Daniel Kennedy

Hendy Group Ltd v Daniel Kennedy is an Employment Appeal Tribunal decision about redundancy and alternative employment. The redundancy itself was genuine. The employee also accepted that he had been fairly selected within his team. The dispute was about what the employer did, or failed to do, to explore other roles before dismissal.

The tribunal found the dismissal unfair because the employer had not properly considered alternative employment. The EAT upheld that result. For employers, the case is a practical reminder that a fair redundancy process is not only about selection and consultation. It can also turn on whether you took reasonable steps, in the circumstances, to avoid dismissal by considering suitable vacancies across the business.

Mr Kennedy worked for a large car dealership group. By the time of dismissal, he was a trainer in the business’s Training Academy. He had moved into that role in 2015 after a long career in the motor trade, including substantial sales experience and management of a Kia distributorship. The tribunal found he had the background, enthusiasm and experience to be considered for sales-related roles in the wider group.

In 2020, a redundancy situation arose in the training team, largely during the COVID period. Mr Kennedy did not dispute that the redundancy was genuine. He also accepted that he had been fairly selected for redundancy within that team. His case was narrower and more practical. He said the employer had not given fair consideration to whether he could continue working in another role.

At a consultation meeting on 4 September 2020, he was told he could apply for jobs listed on the intranet. The tribunal found that HR took no step whatever to assist him. No role was suggested. No one appears to have coordinated a redeployment process. His line manager said he would speak to anyone who wanted to phone him, but also said he could not assist with roles outside his own department.

About a week after being told he was to be dismissed, Mr Kennedy returned his laptop. He then lost access to internal email and the intranet. From that point, he had only the same access to vacancies as any member of the public. During his seven-week notice period, there were multiple sales jobs available within the group.

Despite the lack of support, Mr Kennedy applied for several roles himself. He interviewed for a sales manager role at Bournemouth Toyota. The interviewers accepted he was personable, interviewed well and had previous sales experience, but raised concerns about his motivation, his recent managerial background and his commute. Another internal employee, who was not at risk of redundancy, got the role.

He then applied for a sales adviser role at Christchurch Jaguar Land Rover. The tribunal found he was not interviewed and that the manager who later contacted him did not know he was being dismissed for redundancy. He also applied for a sales manager role at Eastleigh Renault. A manager dealing with that vacancy sought feedback from the earlier Toyota interviewer, and that negative feedback influenced the decision not to interview him. Another candidate with extensive Renault experience was appointed.

He later applied for a sales manager role at Salisbury Toyota and did not hear back. On 6 November 2020, shortly before his employment ended, he asked whether he could remain furloughed so he could continue seeking alternative work within the group and chased the outstanding applications. That request was refused.

On his last day of employment, 9 November 2020, he received an HR email that had earlier been sent to an internal email address he could no longer access. The email said his applications for Eastleigh Renault and Salisbury Toyota would not be progressed and added that, while the business did not wish to deter him from applying for alternative roles, the response would be consistent for other sales-related roles. The tribunal regarded that as especially damaging.

The appeal raised three legal questions. First, had the tribunal used the wrong legal test when it found the dismissal unfair because the employer failed to consider alternative employment? Secondly, had the tribunal wrongly substituted its own view for that of the employer, instead of asking whether the employer’s actions fell within the range of reasonable responses? Thirdly, had the tribunal mishandled compensation by refusing to make a Polkey reduction?

The EAT approached the case through section 98(4) of the Employment Rights Act 1996. Once redundancy is established as a potentially fair reason, the question becomes whether the employer acted reasonably, in all the circumstances, in treating redundancy as a sufficient reason to dismiss that particular employee. In redundancy cases, that can include whether the employer reasonably explored alternatives to dismissal.

The EAT also stressed a familiar point. A tribunal must not simply substitute its own view for the employer’s. The real question is reasonableness. In other words, was the employer’s approach one that a reasonable employer could have taken, having regard to the size and administrative resources of the business and the substantial merits of the case?

The EAT dismissed the employer’s appeal. It accepted that the tribunal’s legal summary was brief and that some of its language could have been more refined. But reading the judgment as a whole, the EAT held that the tribunal had the correct test in mind and had not made an error of law.

The key point was the tribunal’s factual finding that the employer had effectively done nothing meaningful about alternative employment. Mr Kennedy was told he could apply for jobs on the website. HR communicated with him through an email account he could not access. Managers were not told he was at risk of redundancy.

There was no evidence of other practical steps a reasonable employer might have taken, such as discussing where his interests lay, helping identify suitable roles or encouraging conversations about different positions.

The EAT said it was open to the tribunal to conclude that this was an approach no reasonable employer would have adopted, particularly given the size and resources of the organisation and the number of vacancies that appeared, on paper at least, suitable for him to be considered for.

On the substitution argument, the EAT rejected the employer’s case. It held that the tribunal’s findings about Mr Kennedy’s background, attitude and prospects were relevant to remedy and to the likelihood that he would have secured another role if the employer had properly considered alternative employment. The tribunal had not simply replaced the employer’s judgment with its own preference.

On compensation, the EAT accepted that the Polkey point was the employer’s strongest argument. Even so, reading the decision as a whole, the EAT concluded that the tribunal had found that, had the employer carried out its responsibility to consider alternative employment properly and had Mr Kennedy not been unfairly blocked, he would have secured alternative work. That was why no Polkey reduction was made. The compensation award of £19,566.73 remained in place.

One of the most important pieces of evidence was the HR email received on Mr Kennedy’s last day. It said that because of concerns arising from an earlier interview, the response would be consistent for other sales-related roles. The tribunal described that as deeply unhelpful. The EAT agreed it was a proper basis for criticism.

From a business perspective, the problem was not just tone. The email appeared to show that one interview outcome had effectively closed off a whole category of roles across the group. That cuts directly against the idea of genuine consideration of alternative employment. It can make the process look predetermined, especially where the employee is already at risk of redundancy and trying to remain employed.

The EAT said the email appeared to evidence a decision that, no matter how Mr Kennedy interviewed and no matter what his application said, he would not be considered for sales roles. That was a serious finding. It helped explain why the tribunal concluded he had been blocked rather than fairly assessed.

The practical lesson is about process, coordination and evidence. If you are making someone redundant, you should be able to show what your business actually did to avoid dismissal. A tribunal may look beyond the formal consultation letters and ask whether anyone actively explored realistic alternatives.

This is especially important in larger organisations with multiple sites, brands or departments. The EAT expressly noted the size and resources of the employer. Where a business has a wider pool of vacancies and the administrative capacity to coordinate redeployment, doing very little can be hard to defend. But smaller employers should not ignore the case. The legal question remains reasonableness in the circumstances, including the size and resources of the undertaking.

The case does not create a fixed checklist that applies in every redundancy. It does, however, show the kinds of facts that can persuade a tribunal that dismissal was unfair. Those facts included loss of access to internal systems, no practical support from HR, no clear communication with hiring managers, delay in dealing with applications and language suggesting the employee had effectively been ruled out in advance.

It also shows that a tribunal may distinguish between two separate questions. One is whether another candidate may have been stronger in an open recruitment exercise. The other is whether the at-risk employee was suitable to be considered for the role as part of a fair redundancy process. Those are not always the same question.

If your business is running a redundancy process, this case is a good prompt to audit the practical steps around alternative roles. The aim is not to guarantee redeployment. The aim is to show that you acted reasonably and genuinely considered suitable alternatives before dismissal.

Think about the process from the employee’s point of view. Could they see the vacancies? Did anyone discuss realistic options with them? Did hiring managers know they were at risk of redundancy? Were applications handled promptly? Did any internal message suggest they had already been written off?