⏱️ 5 minute read
An online search for legitimate reasons to make a director redundant, internal HR messages and a meeting lasting around five minutes all featured in Blyth v Clockwork Group Holdings Ltd. The tribunal found that redundancy was a pretext and awarded £118,223 for unfair dismissal.
For employers, the case is a useful reminder to establish the real reason for a proposed dismissal before deciding which process to follow. The documents created along the way may tell a rather different story from the dismissal letter.
Background
Mr Blyth was the Finance Director. After he challenged bonus calculations, his relationship with the business owner deteriorated. He was subsequently dismissed, supposedly for redundancy, without prior warning or consultation.
On the morning of the dismissal, the owner shared the results of an online search for “Legitimate Reasons for Director Redundancy” in internal messages with HR. Those exchanges later formed part of the tribunal evidence.
The tribunal rejected redundancy as the genuine reason. It also applied a 25% uplift for failure to follow the Acas Code. The compensatory award was then limited to the £118,223 statutory cap applicable to this dismissal.
Start with the reason you can evidence
A difficult relationship with a senior employee needs dealing with, but it does not itself establish a redundancy situation. If the problem is conduct, performance or a breakdown in the working relationship, identify it honestly and take advice on the appropriate approach.
Where redundancy is genuinely being considered, record the business circumstances and the change in the requirement for work. Be clear about what is proposed, which roles may be affected and why. That explanation should exist before the outcome has effectively been decided.
There may be more than one issue in the background. A commercial rationale still needs scrutiny where a restructure happens to remove someone with whom a decision-maker has recently fallen out.
A dismissal letter cannot repair the earlier evidence
Internal messages can become relevant evidence, including exchanges between managers and HR. A subject access request or tribunal disclosure may bring them into view long after the conversation.
The practical response is to make sound, justifiable decisions and record them accurately. Ask managers to distinguish facts from assumptions, explain the reasoning behind a proposal and preserve relevant records when a dispute is anticipated. Do not retrospectively rewrite the history or remove inconvenient messages.
A short message written before advice was taken may carry more weight than a polished explanation prepared after a claim arrives. Involve HR and advisers while there is still a real decision to influence.
Give the process room to work
Meaningful consultation requires an opportunity to consider representations before reaching a final decision. A meeting to deliver an already-prepared outcome cannot perform that function.
Check that the chosen process fits the actual concern, that the employee has an appropriate opportunity to respond and that the decision-maker remains open to the evidence. In a genuine redundancy situation, consultation, selection and alternatives need proper attention.
The Acas Code generally does not apply to redundancy dismissals. Its relevance here arose from the tribunal’s findings about the real dismissal; this case should not be read as imposing a standard 25% uplift on redundancy claims.
Check the records and the financial exposure
The January 2027 unfair dismissal reforms make preparation more pressing, including the removal of the compensatory award cap for dismissals within the new rules. Our existing guide to the January changes explains the timing, while our compensation article looks at financial exposure.
To check whether your records, manager decisions and witness arrangements would stand up months later, use our Employment Tribunal Readiness Check.
How can we help?
If you’re considering a restructure or a difficult senior exit, involve us before the decision is fixed. We can help you work through the reason, process and commercial risks, and support you if a dispute follows. Get in touch.
This update is accurate on the date it was published but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.
