Case Law Archives - Refreshing Law

Case law update — July 2025

Case: Hendy Group Ltd v Daniel Kennedy [2024] EAT 106

Background

Daniel Kennedy, a long-serving trainer at Hendy Group Ltd (a car dealership), was made redundant in 2020. He accepted both the need for redundancies and his selection. However, he claimed his employer failed to explore alternative roles for him.

What the employer did

The employer pointed Mr. Kennedy to its internal job board and expected him to apply, like any external candidate. He did apply and attended interviews but wasn’t successful. Instead, an internal candidate and an external candidate were appointed, neither of whom were at risk of redundancy.

Crucially, there was no HR or managerial support to help him find a suitable alternative. It is also important to note that one internal manager actively discouraged his applications, and the employer later confirmed in writing that any further applications made by Mr Kennedy would be rejected.

Tribunal finding

The Employment Tribunal (ET) ruled that the dismissal was unfair because the employer had failed in its obligation to the Claimant to assist him to find an alternative role. In summary that the mere signposting to vacancies, whereby the Claimant was in the same position as an external candidate was insufficient.

Appeal outcome

The employer appealed but the Employment Appeal Tribunal (EAT) upheld the ET’s decision.

The EAT rejected the appeal on all points, reinforcing that:

Employers must actively assist employees in finding suitable alternative employment.
Simply pointing employees to internal vacancies is not sufficient.
The ET was entitled to conclude that Mr. Kennedy would likely have been redeployed with proper support, as there were a number of vacancies for which, on paper at least, Mr Kennedy may have been suitable. As a result, no reduction in compensation (Polkey) was required.

Take aways

Redundancy support must go beyond job postings. Active engagement is key — HR/line managers should help identify suitable roles, discuss interests, and offer guidance (even if this involves potential demotion).
Document support efforts clearly — failure to do so could lead to a finding of unfair dismissal.
Don’t block or discourage internal applications from employees at risk of redundancy.
Reasonableness remains central — but what is “reasonable” now includes taking steps beyond minimal signposting.
If you’re managing a redundancy process, ensure your HR team is prepared to offer real, practical support when considering suitable alternative roles.

Anna Denton-Jones
Refreshing Law

Whilst many will have looked at the behaviour of P&O and criticised them and they are undoubtedly at the extreme end of the spectrum, it has caused me to reflect on the extent to which all organisations from time to time “take a view” about legal risk and to some extent, price that into the decision-making process. I defy anyone in HR to say that they have never done this.

What I think the reaction demonstrates is how far we are moving forward and that ESG is becoming mainstream, with the debate and the discussion about P&O showing that organisations by and large ‘get’ the idea that it’s more than just about legal compliance but treating people fairly and with dignity as well as ensuring the right image for the organisation, in terms of its values is as important, given what can happen with social media.

The Government has clearly been on the backfoot — literally in the days leading up to P&O Friday, following a private members bill, attempting to tackle so called fire and re-hire practices, the Minister stood up in parliament and confirmed that the government had no intention of making any changes in this arena. Fast-forward a couple of weeks and now hasty announcements around a number of steps that are going to be taken in the maritime area to ensure National Minimum Wage etc.

The relevant issue for everyone is in relation to what they have said about a new statutory code on ‘fire and re-hire’ tactics which will be produced. It sounds as though this will be putting what Acas already advise onto a statutory footing, in the same way as we used to with the Disciplinary and Grievance Procedures. We are already used to Tribunals and Courts taking the Code into account when considering cases of unfair dismissal and them having the power to uplift the award that is made to any successful employee’s compensation by up to 25% where there has been an unreasonable failure to follow that Code. That is the model that is going to apply here.

At this stage we don’t have the actual Code but I would imagine that it will be following the guidance that is already there to consult with staff, taking into account the background legal position on this issue. Indeed the 11th November 2021 advice published by Acas suggests employers should fully consult their workforces and make every effort to reach agreement on any contract changes, noting that fire and re-hire is an extreme step that can damage staff morale, trust, productivity and working relations. So in effect this is just giving the Acas guidance statutory force. Currently there has been no confirmation of when exactly this will happen.

On another note it looks like the insolvency service has been tasked with considering the circumstances around the CEO of P&O’s failure to lodge the HR1 form which is a criminal offence and the responsible statutory director can be fined for this. I imagine that there is a certain amount of political pressure to ‘make an example’. I know a few years ago I looked into how many times this had actually been done and the evidence base was really small, to the point of being miniscule. However, there were directors who made redundancies during furlough who were prosecuted so there is a precedent. Even if an employer decides to do what P&O did and commence with statutory consultation because they would essentially be buying out that right by making ex gratia payments under a settlement agreement, it would still be important for the HR1 form to be filed as a protection for the directors involved.

Anna Denton-Jones
Refreshing Law

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