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Redundancy and Restructuring - What Is The Tribunal's Approach When Considering Fairness?

on Friday, 28 April 2017.

The Employment Appeal Tribunal (EAT) has recently considered the approach that a tribunal should take in assessing fairness where an employee is made redundant after competing for newly-created posts following a restructure

The Facts

The case is Green v London Borough of Barking & Dagenham. Ms Green was employed as one of three Senior Regeneration Professionals by the London Borough of Barking & Dagenham ('the Respondent').

In October 2012, the Respondent began undertaking a process of restructuring and redundancies, which included the proposed deletion of the three Senior Regeneration posts and the creation of two positions which the three existing employees would compete for by way of an unseen written test and interview.

Having scored the lowest of the three candidates, Ms Green was not selected for one of the two positions and was made redundant. She subsequently claimed unfair dismissal on the basis that one of the other candidates had had prior knowledge of the project which was used as the basis of the written test, and this had not been given proper consideration by the Respondent's appeal panel.

In considering this case, the Employment Tribunal (ET) held that Ms Green's case was not a classic redundancy selection case but was more akin to the facts of Morgan v Welsh Rugby Union, a case which involved the deletion of posts and a competitive interview process for new roles. In the ET's view, Ms Green's case required an assessment of her ability to perform the new role, as opposed to the application of selection criteria reflecting track record in the Senior Regeneration post.

The ET therefore followed Morgan in reaching its decision, without addressing the various questions as to fairness that are relevant when considering a classic redundancy situation. On this basis it dismissed Ms Green's claims.

EAT Decision

On appeal, the EAT concluded that the tribunal had taken a 'blinkered' approach by elevating the test in Morgan to a rule of law. This was erroneous firstly, as the facts of this case were not entirely equivalent to the Morgan facts, and secondly, in any event Morgan made it clear that the key question for the tribunal was whether the Respondent had acted within the band of reasonable responses test applied to all unfair dismissal cases.

The ET had therefore failed to consider certain key issues going to the fairness of the dismissal, including the composition of the pool of selection and the genuineness of the appeal.

However in its decision, the EAT noted that the fact that the Respondent had conducted a process that sought to determine who would be best qualified for the posts in the new structure would not necessarily have prevented any resulting redundancy from being within the band of reasonable responses.

The case was remitted for rehearing by a freshly constituted ET.

Best Practice

The EAT's decision in this case demonstrates that the key question for a tribunal when considering a claim for unfair dismissal will always be whether an employer has acted fairly and reasonably.

In the case of a classic redundancy procedure involving selection and scoring, issues of fairness will turn on factors such as the pool of selection, whether scoring criteria were objective and non-discriminatory, whether a genuine and open-minded consultation process was followed, and whether attempts were made to find suitable alternative employment.

Redundancy scenarios following a restructuring whereby posts are deleted and new roles created for which a competitive interview process is conducted, will involve additional questions of fairness including:

  • whether the interview panel were suitable to assess candidates
  • whether interviews were broadly the same length
  • whether a fair and objective scoring system was used

For more information, please contact Eleanor Boyd in our Employment Law team on 0207 665 0940.

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