News & Insights

In the case of Andrew Blyth v Clockwork Group Holdings Limited (8000899/2026, the Employment Tribunal in Scotland found that the employer had unfairly dismissed an employee and awarded him £118,223, which was the maximum compensatory award available for unfair dismissal at the time. The key issue was whether this was a genuine redundancy situation, or whether redundancy had been used as a cover for dismissing the employee for another reason.

The employee was the Group Finance Director. He was dismissed with immediate effect on 10 December 2025 at a meeting which lasted around five minutes. The dismissal letter said his role was redundant. However, there had been no warning, no consultation, and no opportunity for him to comment on the proposed redundancy before the decision was made.

A few days before the dismissal, the employee had challenged how his director’s bonus was being calculated. The owner of the business, who made the dismissal decision, reacted strongly and said he was becoming “disgruntled/upset” with the employee’s attitude. After that exchange, there was no further direct contact until the dismissal meeting, which the Tribunal found unusual because they would normally speak or email most days.

The employer said the finance team was “top heavy” and that removing the employee’s role would save money. The Tribunal did not accept this as the real reason for dismissal. There was no evidence that redundancy had been considered over a period of months. Instead, the documents showed that only a few hours before the dismissal, the business owner searched online for “Legitimate Reasons for Director Redundancy” and exchanged messages with HR about what to say, and what not to say, at the meeting.

The Tribunal found that the real reason for the dismissal was not redundancy, but the employer’s dissatisfaction with the employee for challenging his bonus arrangements. It described the redundancy explanation as a “sham” and found that the employer had acted in bad faith by trying to dress the dismissal up as redundancy. As the employer could not show a genuine fair reason for dismissal, the dismissal was unfair.

When deciding compensation, the Tribunal accepted the employee’s evidence about his losses. He had earned £120,000 per year, received pension contributions and usually received a director’s bonus. He looked for work extensively after his dismissal and started a new role on 13 July 2026, but at a lower salary. His losses included past loss of earnings, future loss of earnings, pension loss, bonus loss and job-seeking expenses.

The employer argued that compensation should be reduced to nil because the employee would have been dismissed anyway. The Tribunal rejected that argument because there was no evidence to support it. It also applied a 25% uplift for failure to follow the ACAS Code, because the real issue was treated as conduct-related and the employer had followed no proper disciplinary process. The award exceeded the statutory cap, so compensation was limited to £118,223.

What’s the lesson?

1. Do not label a dismissal as redundancy unless redundancy is genuinely the reason.

A Tribunal will look at what actually drove the decision to dismiss. If redundancy is used as a convenient label for another issue, such as a disagreement, a performance concern or a conduct concern, the employer is exposed to an unfair dismissal finding.

2. Follow a proper process, even where the business case seems obvious.

Even in a small business, employees should normally be warned, consulted, given a chance to respond, and have alternatives considered before redundancy dismissal. A short meeting and a pre-prepared dismissal letter will rarely be enough.

3. Keep a clear documentary trail and take advice early.

If redundancy is genuinely being considered, keep records of the business rationale, roles affected, selection process, consultation steps and alternatives considered. A clear paper trail will help show that the decision was genuine and not made after the event.