Redundancy and bumping: everything employers should know

Redundancy stands out as one of the most challenging situations an employer can face. While the concept of making a role redundant might seem straightforward – the position is gone, and so is the employee who occupied it – a lesser-known but nonetheless important move is referred to as “bumping”.

For HR professionals and business leaders, understanding redundancy and the nuanced role of bumping is all about fairness, mitigating risk and safeguarding your organisation’s reputation.

We understand the intricacies of these processes, and the vital role HR plays in navigating them effectively. This blog post will explain what bumping entails, when it should be considered, how to manage the process and why expert HR guidance is invaluable.

What is redundancy bumping and when should it be considered?

When a role is identified as redundant, the immediate thought is often that the individual occupying that role will be dismissed, provided no suitable alternative vacancy can be found.

However, “bumping” introduces a different dynamic. It involves moving an employee whose role is genuinely redundant (Employee A) into a role currently held by another employee (Employee B), who is then subsequently dismissed.

Even though Employee B’s role still exists, their dismissal is considered a redundancy if the primary reason for their dismissal is to free up a position for Employee A. Employee B is then entitled to a redundancy payment, but only if redundancy is genuinely the main reason for their dismissal.

This concept might seem counterintuitive at first glance, but it can be a legitimate and, in some cases, a necessary consideration in a fair redundancy process. Bumping can be particularly relevant in several scenarios:

The redundant employee is more senior or experienced

If Employee A, whose role is redundant, possesses a higher level of seniority, experience, or critical skills that the organisation wishes to retain, bumping them into a more junior role held by Employee B might be considered. This allows the business to retain valuable human capital that would otherwise be lost.

The employee at risk suggests it

Employees facing redundancy may proactively suggest bumping as an alternative to their dismissal. This can occur if they identify a role within the organisation that they are qualified for and believe they could seamlessly transition into, even if it means another employee’s role becomes redundant as a result. Ignoring such suggestions without due consideration could potentially lead to claims of unfair dismissal.

The business wants to retain specific skills but lacks suitable vacant roles

Sometimes, an organisation may wish to retain the unique skills or institutional knowledge of an at-risk employee but has no immediately available, suitable vacant roles. Redundancy bumping can provide a mechanism to keep that talent within the company by creating a vacancy in a less critical or more easily replaceable role.

To avoid unfair dismissal claims

While not legally mandated in every redundancy situation, the consideration of redundancy bumping can be crucial in demonstrating that an employer has acted fairly and reasonably. Failing to consider bumping, especially when it is a clear and viable option, could leave an employer vulnerable to unfair dismissal claims.

It’s important to differentiate between bumping and simply moving an employee into a vacant role. Bumping specifically involves displacing an existing employee to make room for a redundant one, leading to the dismissal of the displaced employee by reason of redundancy.

Managing the process: a step-by-step guide for employers

Successfully navigating a redundancy process that involves bumping requires careful planning, clear communication and a commitment to fairness. HR plays a pivotal role in making sure that all steps are followed diligently to minimise legal risks and maintain employee morale. Here’s a step-by-step guide for employers:

Identify the pool for redundancy

Before even considering bumping, the initial step in any redundancy process is to clearly identify the roles at risk of redundancy and define the “pool” from which employees will be selected. This pool should be objective and non-discriminatory, based on clear business reasons for the redundancy.

Establish selection criteria (if applicable)

If there are more employees in the redundancy pool than roles to be made redundant, fair and objective selection criteria must be established and applied. These criteria should be measurable, non-discriminatory and clearly communicated to employees.

Consider alternatives to redundancy

Before proceeding with any redundancies, employers should genuinely explore all viable alternatives. This includes identifying suitable alternative vacancies within the organisation where an at-risk employee could transition without the need for bumping.

Employers should also assess if adjustments like reduced hours or flexible working could prevent redundancies. Finally, gauge employee interest in voluntary redundancy as another potential solution.

Begin individual consultation with the redundant employee

Once a role is identified as redundant, you must initiate individual consultation with the employee in question (Employee A). This is an essential stage where potential bumping scenarios should be discussed. Clearly explain the reasons for the redundancy and why their specific role was selected.

Crucially, explore alternatives, including bumping, by presenting potential new roles, their responsibilities and salary differences. Ascertain the employee’s willingness to accept a potentially lower-level position, as they might even suggest a bumping arrangement themselves. Finally, discuss available support, such as outplacement services or retraining.

Assess suitability for redundancy bumping

If bumping is being considered, a thorough and objective assessment of Employee A’s suitability for Employee B’s role is essential. This involves an evaluation of whether Employee A possesses the necessary skills, qualifications and experience to effectively perform the duties of Employee B’s position.

Moreover, while bumping can involve a move to a lower-level role, the new position must not be so vastly different that it becomes unrecognisable or unreasonable for Employee A to undertake, requiring careful consideration of factors like salary, responsibilities and working conditions.

Finally, the employer must carefully consider the potential impact on Employee B and the wider team, making certain that the decision to dismiss Employee B to retain Employee A is justifiable and aligns with the overall fairness of the redundancy process.

Begin individual consultation with the displaced employee

When pursuing bumping, Employee B’s process must be handled with the same fairness as any other redundancy. This means clear communication, explaining their role’s redundancy is due to accommodating Employee A, whose role is genuinely redundant, not performance.

Follow proper redundancy procedures, including individual consultations on process, rights and alternatives. Make sure Employee B receives statutory and contractual redundancy payments and offer support like outplacement services.

Document the entire process

Complete documentation is paramount throughout the entire redundancy and bumping process. This includes recording the rationale for considering bumping for each at-risk employee, along with detailed notes from all consultation meetings with both Employee A and Employee B, specifying dates, attendees, points discussed, and any agreements reached.

Employers must also clearly articulate the decision-making process, including the justification for selecting employees for bumping and the ultimate dismissal of Employee B. Finally, retaining copies of all related correspondence, such as letters and emails, is essential to demonstrate fairness and adherence to proper procedure.

The role of external HR support in a redundancy bumping scenario

HR’s role in a redundancy process involving bumping is central and critical. External HR professionals act as strategic advisors, facilitators and guardians of fairness and compliance. Their responsibilities include:

• Policy development and review: Making sure that the organisation’s redundancy policy is up-to-date, comprehensive and includes provisions for bumping where appropriate. 

• Legal compliance: Providing guidance on employment law, ensuring the process adheres to all statutory requirements, mitigating legal risks. 

• Process management: Designing and managing the step-by-step redundancy process, including establishing timelines, scheduling meetings and making certain all documentation is completed accurately. 

• Communication strategy: Developing clear, empathetic and consistent communication strategies for all affected employees. 

• Consultation facilitation: Guiding managers on how to conduct effective and meaningful consultations with employees so that all discussions are constructive and legally compliant. 

• Risk mitigation: Identifying and addressing potential risks, such as unfair dismissal claims or discrimination allegations. 

• Employee support: Providing guidance on support services for employees, including outplacement, counselling and benefits information. 

• Manager training: Equipping managers with the knowledge and skills to handle redundancy conversations sensitively and effectively.

Mirab v Mentor Graphics: a real-world example

The 2018, real-world case of Mirab v Mentor Graphics is a particularly relevant example that sheds light on the employer’s obligation (or lack thereof) to consider bumping.

In Mirab v Mentor Graphics, the Employment Appeal Tribunal (EAT) confirmed that employers are not legally required to consider bumping in every single redundancy case. This might seem to contradict the earlier advice about considering it for fairness, but the key lies in the nuances of “fairness” and “reasonableness.”

While there’s no blanket legal obligation to consider bumping, the EAT’s ruling in Mirab v Mentor Graphics underscores that failing to consider bumping could, in certain circumstances, make a dismissal unfair.

This means that, while it’s not a hard-and-fast rule, an employer who completely dismisses the idea of bumping without any genuine consideration, especially when it appears to be a viable and reasonable option, could face challenges if an employee brings an unfair dismissal claim.

The ruling reinforces the importance of good practice. It is always advisable for employers to at least consider bumping, particularly in the following situations:

• If an employee facing redundancy suggests a bumping scenario, an employer should genuinely explore it rather than dismissing it out of hand. 

• If there’s an obvious role that the at-risk employee could be bumped into, which is not too dissimilar from their current role (in terms of skills, salary level and responsibilities), then ignoring this possibility might be seen as unreasonable.

The Mirab v Mentor Graphics case serves as a powerful reminder that, while employers have a degree of discretion, their decisions must be reasonable and justifiable. A robust, well-documented process that demonstrates genuine consideration of alternatives, including bumping, is the best defence against claims of unfair dismissal.

How can Sapphire HR help?

We specialise in providing pragmatic, legally sound and commercially focused HR advice, and our expertise in redundancy and restructuring processes, including the intricacies of bumping, can offer your organisation invaluable support.

We assist by developing and reviewing robust, compliant redundancy policies that clearly outline bumping procedures, providing expert guidance throughout the entire process from planning to communications, and drafting all necessary legally compliant documentation to mitigate risk.

Our team also advises on fair selection criteria, strategically minimises legal exposure by identifying potential pitfalls, and offers practical, hands-on support during challenging conversations with both managers and employees.

By partnering with Sapphire HR, you can be confident that your redundancy processes are handled with professionalism, empathy, and strict adherence to legal requirements, allowing you to concentrate on your core business, secure in the knowledge that your people matters are expertly managed.

For tailored advice and support on managing redundancy and bumping, we encourage you to contact us today, so we can help you navigate these challenging situations effectively and fairly.