Employers making redundancies must offer any other suitable vacancies they have to all redundant employees and accept applications on a first come, first served basis, according to the Supreme Court.

The court's decision means that employers have no leeway to choose which redundant employee should fill an opening, where it is making more employees redundant than it has alternative positions.

This represents a departure from the principle established in previous case law that it is the employer's decision as to which employee(s) should leave when it no longer needs (all or as much of) a particular type of work to be done.

In effect, the court has decided that the employee who fills a vacancy in these circumstances should not be the one who, in the employer's view, is most suitable for it. Instead, it should depend on chance, speed of information flow between employer and employee or particular circumstances that affect the response times of individual employees.

The case involves the closure of a R&D department comprising seven employees. Four were reassigned to new positions with similar job descriptions in other departments, while the other three were made redundant. One of the redundant employees contested his dismissal and, despite losing in the court of first instance and the appellate court, had his case heard by the Supreme Court following an extraordinary appeal by the Attorney General.

The court's decision to declare his dismissal void because he wasn't offered alternative employment is questionable in the light of existing case law (R 90/1967, 3 Cdo 33/2008). If alternative positions must always be offered to the first applicant (where there are insufficient openings for all redundant employees), the outcome could be affected by the way in which the employer chooses to notify the employees of the openings.

Since the decision and the law do not specify how employees should be notified of openings, employers may try to misuse the procedure and favour some employees by notifying them by phone whilst informing the others by letter. However, it also puts the employer in an impossible position where it notifies all employees in a meeting, and they all express interest in the positions simultaneously.

The Supreme Court needs to offer solutions to these issues in its follow-up decisions, as it will be these that determine the impact of this case on redundant employees and on the practice to be adopted by the courts.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

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The original publication date for this article was 03/07/2012.