Considering Fairness in Redundancy Selection and a Re-organisation
The Employment Appeal Tribunal (EAT) was recently asked to consider whether the “fairness” test applied equally in the case of redundancy dismissals where employees were required to compete for newly-created posts following a restructure as it did when considering a case of downmanning. The EAT concluded that even where a redundancy dismissal arose out of selection for posts in a new structure, some consideration of the traditional criteria for a fair redundancy selection(warning, consultation, use of objective selection criteria, fair application of the criteria and consideration of alternative employment) had to be made.
In the case of Green v London Borough of Barking & Dagenham, 3 senior regeneration professionals were made redundant and selection for 2 new but equivalent vacant positions was carried out at the same time, where the pool for selection was rightly limited to those whose positions had been made redundant. Ms Green was not successful in the selection, having scored lowest out of the 3 in the selection process consisting of a written test and interviews. Ms Green sought to appeal against the redundancy alleging that one of the other candidates had had prior knowledge of the test subject. The employer however refused to hear the appeal, explaining that in their opinion, this was not a redundancy selection but an assimilation process.
The employment tribunal concluded that this was not a case where it needed to determine the fairness of the dismissal because the question was not why the Claimant had been selected for redundancy but rather why had she not been appointed to one of the remaining positions. The EAT however concluded that at all times, when employment tribunals are required to consider dismissals, consideration should be paid to the fairness requirement set out at section 98(4) of the Employment Rights Act 1996.
This serves as a valuable lesson to employers seeking to reduce headcount through reorganisation and selection for new roles to replace the redundant jobs, reminding them that they must not see such an exercise as an opportunity to discard the requirement of objectivity and fair process. Employers are warned that the degree of difference between the old jobs and the new positions may affect the degree to which previous job performance constitutes relevant criteria. Although employers are entitled to give weight to performance in a selection process, throughout the process employer should ensure that they apply the traditional principles of fairness in ultimately determining who will have their employment terminated.