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Healthy Competition

If employees are asked to compete for their jobs following a restructure, does it change the test for whether they were unfairly dismissed? Is ‘fairness’ assessed by reference to a fair redundancy process or does some other test apply?

These questions were recently considered by the Employment Appeal Tribunal where an employee was made redundant after she was unsuccessful in applying for a role following a restructure.

Green v London Borough of Barking & Dagenham

Ms Green was employed by London Borough of Barking & Dagenham as a Senior Regeneration Professional from August 2008 until July 2014. Ms Green was also a trade union steward from 2012.

In October 2012 the Borough undertook a process of restructuring, resulting in redundancies. As part of the restructure, the team of three grade P06 posts (which Ms Green was part of) was to be reduced to two posts. Jobholders would compete for the posts by a written test and interview. A report of this was sent out to all individuals.

The restructure process involved a job-matching stage. An individual had to score more than a 65 per cent match to slot in to the role, if there were two or more people that matched up to the role a competitive interview would then take place. If an individual was less than a 50 per cent match for any of the roles, they would potentially be made redundant if no alternative position could be found.

Ms Green scored the lowest of the three P06 candidates and was not selected for either of the two roles and was made redundant.

Ms Green appealed against her redundancy arguing, amongst other things, that the written test had been unfair as this was based on an actual project in the Borough and one of her colleagues competing for the role was familiar with the project having given and heard presentations about it. The other candidate’s husband had also contributed to the drafting on an informal report on the project.

The Borough took the view that it was not a redundancy selection but rather an assimilation process for the remaining posts and therefore Ms Green had no right to appeal on a redundancy issue.

Ms Green brought claims for unfair dismissal.

Employment Tribunal

The ET rejected Ms Green’s claims. It held that it did not need to determine the fairness of Ms Green’s dismissal as if dealing with a dismissal for redundancy but on the basis of why she had not been appointed to one of the remaining positions.

The ET concluded that the test was fair and identified that Ms Green had outscored her colleagues on certain elements of the test. Consequently, her dismissal was fair.

Ms Green appealed to the EAT.

Decision

The EAT allowed Ms Green’s appeal, suggesting that the ET had adopted a ‘blinkered approach’ when considering questions arising under the Employment Rights Act 1996. The ET failed to demonstrate that it had reviewed all stages of the decisions made and the process followed by the Borough and, in particular, whether the dismissal was fair in all the circumstances of the case.

The EAT set out that by effectively ignoring the redundancy aspect, the ET had failed to consider the composition of the selection pool or Ms Green’s appeal as to the advantages of her colleague having familiarity with the project in the written test. The EAT also commented that this was a large scale redundancy exercise with recognised trade unions and the ET failed to address any issues of collective consultation.

The EAT reiterated that at all times, when considering dismissals, the test for unfair dismissal set out in the Employment Rights Act 1996 should always be central to any judgment.

Due to its failure to do so, the EAT concluded that the ET’s findings were unsafe and sent the case back to be considered from scratch by a different ET.

Comment

Employers can often get into hot water when undertaking a restructure, especially where redundancies arise as a consequence.

Whilst the whole process is important, employers need to be especially careful when identifying the pools and selection criteria in identifying who is at risk of redundancy.

When employees will ‘compete’ for newly created roles, employers must adopt a consistent and fair approach and bear in mind that it is effectively still part of the redundancy process.

If you have any queries relating to redundancy or any other HR queries, please do not hesitate to contact Joanne Holborn, Tom Scaife or Caroline Rayner on 01228 552600 or 01524 548494.

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