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Redundancy and fair procedures when competing for new roles

31st May 2017

Redundancy is a potentially fair reason for terminating employment. Over the last few decades the Courts and Tribunals have established guidance on the steps that a fair employer is expected to take in carrying out a redundancy process. However, when a business carries out a re-organisation by getting staff to compete for new roles, with the result that one or more of those members of staff will not have a role at the end of that process, should employers follow the steps expected in a normal fair redundancy process, or can they deal with it as it were a recruitment process for totally new jobs? How should an Employment Tribunal address the question of the fairness of the dismissal of the employee(s) that could not be found a new role in the new structure? 

In the recently reported case of Green v London Borough of Barking & Dagenham the Employment Appeal Tribunal (EAT) considered these issues. The case involved a situation where the employer had decided to reduce the number roles from three to two. The employer decided to deal with this by means of the three competing for the two roles that would exist after the restructure. An internal process was then followed. The Claimant received the lowest score of the three competing employees. The Employment Tribunal that first heard the Claimant’s case decided that this was not a case where the established guidance from case law on fair redundancy procedures was applicable. It reached that decision because it concluded that the issue was not really why had the individual been selected for redundancy, but rather why had the individual not been appointed to one of the new roles in the restructure. The Employment Tribunal in reaching that conclusion had decided not to consider many of the traditional questions in redundancy cases such as the consideration of the composition of the pool for selection and the ability and scope of any opportunity to appeal against the decision.

At the appeal the Employment Appeal Tribunal concluded that the Employment Tribunal had been wrong in its approach in the case, and it should have focused on the set requirements of the legislation on fairness of dismissal, and that the Tribunal must review the employers decisions and the process followed, and then determine if the employer had acted within the range of reasonable responses at each stage.

This case illustrates that even if an employer chooses to give effect to a re-organisation by a recruitment exercise to the new roles, it must still give effect to the traditional steps expected in a fair redundancy if a role is to be lost as a result of the process. This should include giving the candidates the opportunity to question the pool for selection, challenge their own scores and assessment, and have the chance to have an appeal against the decision. In these cases the employer should still take steps to find suitable alternative employment for any person that becomes at risk of losing their job.

If you need any help or advice on any matter raised in this article do not hesitate to contact us at Hallett Employment Law Services Ltd.

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