Redundancy: A reminder for employers
Thu 01 Jun 2017
The Employment Appeal Tribunal’s (“EAT”) recent decision in Green v London Borough of Barking and Dagenham gives employers a helpful reminder of the need to act reasonably at every stage of the redundancy process, even where employees in the redundancy pool are competing for a reduced number of new roles through an interview process.
Facts and Employment Tribunal Claim
Ms Green was employed by the London Borough of Barking and Dagenham as a Senior Regeneration Professional. In October 2012 her employer undertook a restructure of the Regeneration team whereby three posts at her level were scrapped and replaced with two similar roles. Ms Green and two of her colleagues were then invited to compete for the new roles by completing a written test and attending an interview. Ms Green emerged with the lowest score at the end of the process and was dismissed.
She issued a claim against her employer for unfair dismissal on the basis that (among other things):
- there had been a failure to consult meaningfully with her regarding the proposed redundancies;
- the redundancy selection pool was not wide enough;
- she was not considered for assimilation into another, more junior role that was available;
- the written test involved a work scenario which one of the candidates had prior knowledge of, giving him an unfair advantage;
- she was not offered the right to appeal the employer’s decision to dismiss her.
The Employment Tribunal (“ET”) considered that because this was a case where candidates were applying for new roles following a reorganisation, it was akin to the facts of Morgan v Welsh Rugby Union. In the judge’s view, this meant that the ET was prevented from addressing many of the usual questions of fairness that would ordinarily be considered in a redundancy situation.
As a result, the ET gave short shrift to many of Ms Green’s arguments set out above and focused largely on whether the employer had acted reasonably during the interview process. The Tribunal concluded that it had, and she lost her claim.
Ms Green appealed to the EAT which concluded that the ET had misunderstood the Morgan case and had therefore incorrectly failed to consider most of the arguments listed above. It held that in a redundancy situation, the entire process followed should be reviewed by the ET in order to determine whether the employer acted reasonably at each stage, regardless of the method used to select the redundant employees.
A Reminder for Employers
In view of this judgment, employers should remember that following a fair redundancy process ordinarily involves identifying an appropriate pool for selection, carrying out a meaningful consultation process with potentially redundant employees, adopting an objective and fair basis for selection, considering whether alternative employment is available, and, in most cases, allowing the employee the right to appeal any decision that is made.