Lessons for the mobility sector from Hendy Group Ltd v Kennedy

In the mobility sector, where businesses typically operate across multiple locations and brands, restructuring and redundancy are common. Employers must be mindful of their legal duty to consider suitable alternative employment for affected staff.

In the mobility sector, where businesses typically operate across multiple locations and brands, restructuring and redundancy are common. Employers must be mindful of their legal duty to consider suitable alternative employment for affected staff.

The case of Hendy Group Ltd v Daniel Kennedy serves as a reminder of this duty and the need for proactivity, offering particularly valuable lessons for mobility employers.

Background

The Claimant, Daniel Kennedy, had worked for the car dealership Hendy Group Ltd since 2013 and had over 30 years of experience in the motor trade, specifically in sales. In 2021, Mr Kennedy was made redundant from his role as a trainer for the sales team due to a reduction in car sales flowing from the COVID-19 pandemic.

Mr Kennedy was told he could apply for other jobs in the dealership but was ultimately unsuccessful and brought a claim for unfair dismissal. While he accepted the redundancy situation was genuine, he claimed his dismissal was procedurally unfair because the Company had failed to take reasonable steps to help him secure alternative employment within the business.

Employment Tribunal Decision

The employment tribunal agreed with Mr Kennedy, finding that the Company had made insufficient efforts to find alternative employment for him and that he had been unfairly dismissed as a result. Key failings included:

• Mr Kennedy was told he could apply for internal posts on the Company’s intranet but was not given any assistance or guidance with such applications
• his company laptop was removed, leaving him unable to access internal emails or the intranet, effectively reducing his access to job postings to that of an external candidate
• several suitable roles were available during his notice period, including a sales manager position in Bournemouth, for which he interviewed well. However, feedback suggested he lacked leadership ambition and simply wanted to remain employed. The role was given to another employee at the company who was not at risk of redundancy
• Mr Kennedy also applied for a sales adviser role at Christchurch, but the company took weeks to respond and ultimately filled the role externally. Crucially, hiring managers were unaware that Mr Kennedy was at risk of redundancy
• he applied for two further roles in Chandler’s Ford and Salisbury but was later informed that, due to his previously unsuccessful interviews, the response would be consistent for other sales related roles, effectively blocking him from employment.

The employment tribunal therefore concluded that Hendy Group had not adequately supported Mr Kennedy and failed to meet its obligations in exploring alternative employment. The Company appealed.

Employment Appeal Tribunal Decision

The Employment Appeal Tribunal upheld the original decision, finding that Mr Kennedy’s dismissal was unfair. It highlighted that employers must go beyond a “box-ticking” exercise and actively support employees in securing alternative roles.

The EAT emphasised how there was a duty to give Mr Kennedy fair consideration for a role, regardless of other candidates, where a suitable alternative vacancy was identified. It agreed that, had the Company properly considered alternative employment and not unfairly blocked Mr Kennedy’s applications, he would have secured an alternative role. They concluded that no reasonable employer would have adopted the hands-off approach the Company did.

Takeaways for the mobility sector

This case demonstrates how employers are expected to have an active role in finding alternative employment for employees and is particularly relevant when considered through the lens of the mobility sector, where businesses often operate across multiple sites and experience a high turnover of staff.

Employers should take note of the following best practices:

1. meaningful engagement and proactivity 
   Employers must actively support employees at risk of redundancy in identifying and securing an alternative role.  Simply sharing the vacancy list will not be enough. Employers must engage in discussions with employees to understand their preferences and skills, provide reasonable assistance with job applications and ensure information is accessible to employees.
2. multi-site responsibility
   For large, multi-site organisations, such as automotive groups with diverse brands and geographic spread, the duty to consider alternative employment extends across the entire business, not just the employee’s current site. This means they should be sharing vacancies across all locations, ensuring hiring managers are aware of at-risk employees, and facilitating cross-site redeployment where roles are similar or skills are transferable. For example, this could be across dealerships, rental branches or fleet depots. 
   
   The Employment Rights Bill (the Bill) proposes to widen the duty to collective consult on redundancies. The trigger for consultation will now be either 20 or more employees at one establishment or, where employees are being made redundant at more than one establishment, a higher threshold number (which is yet to be determined). Employers will therefore need to consider how to proactively monitor this new trigger point across multiple sites, ensuring they collate all redundancy proposals across the employing entity. Having a centralised system will in turn create an opportunity to keep track of redeployment opportunities across locations and facilitate compliance with the duty to consider suitable alternative employment.
3. suitable alternative employment
   Employers should not assume that an employee is disinterested in or unsuitable for alternative roles. Instead, they should actively explore all reasonable options, which do not need to be identical to the employee’s current position. Possibilities such as retraining, relocation, changes in pay grade, or even demotion should be considered as part of a fair and thorough process.
4. documentation
   In Hendy, the tribunal noted a lack of evidence detailing how alternative roles were genuinely considered for Mr Kennedy. Businesses should take care to document the search for alternative employment, so it is clear what roles were considered and discussed with the employee, and how the employee was supported.

The Bill proposes to increase the maximum protective award for failure to collectively inform and consult before making 20 or more redundancies from 90 days’ full pay to 180 days’ full pay. It is therefore more important than ever for employers to ensure robust compliance, establish a centralised rolling database of vacancies and redundancies and ensure they are proactively considering suitable alternative employment.

Hendy Group v Kennedy underscores the importance of meaningful employer engagement during redundancy processes. For mobility sector employers, the case highlights the need for proactive, well-documented efforts to support redeployment, especially in multi-site environments. With legislative changes on the horizon, now is the time to review internal processes and ensure compliance with evolving legal standards.