Before making an employee redundant, employers must make a genuine and concerted effort to find them suitable alternative employment within the organisation.
But if such a role is available and there is more than one potential candidate in the mix, how should applications be considered?
Redundancies are never far from the headlines at the moment. With many employers experiencing significant financial difficulties due to COVID-19 and the furlough scheme now winding down, many organisations have been forced to reconfigure their workforce in order to survive.
Normally in redundancy situations, employers will develop and apply a fair and objective scoring matrix in order to select employees for redundancy. There is no ‘one-size-fits-all’ checklist to score employees against; however, examples of acceptable criteria may include an employee’s attendance, disciplinary and performance record, as well as their skills and experience.
Occasionally however, employers try to get clever; rather than a traditional selection exercise, they instead conduct an interview process, as case law gives them much more leeway. But is it reasonable to ask potentially redundant employees to compete for their jobs in this way, or are there legal risks involved?
A recent case has highlighted that an interview process should not be used if employees are effectively re-applying for their old position.
Gwynedd Council v Barratt
The claimants in this case, Ms Barratt and Ms Hughes, were primary school teachers who were made redundant during a school amalgamation exercise by Gwynedd Council. The Council closed several schools in the local area, including the school where the claimants were employed, in favour of forming one new, combined school that would occupy the same site as the claimants’ original place of work.
With a reduction in services, the Council needed to determine which of the affected employees would be given what they deemed to be ‘alternative’ roles at the newly-created workplace. Rather than use a scoring process, both claimants were informed that their employment was to be terminated and that the staffing of the new school would be decided through an application and interview process. Both claimants were interviewed but were unsuccessful.
Unhappy that they had been rejected for what were effectively their former roles in the new school – combined with the fact that the Council did not consult with employees about the proposals or allow them to appeal the decision to dismiss – Ms Barratt and Ms Hughes made a claim for unfair dismissal.
Taking account of the facts, the Employment Tribunal found in the claimants’ favour. While the parties acknowledged that being given the right to appeal would not have altered the outcome for the claimants, the Tribunal held that the lack of consultation, coupled with the use of a competitive interview process, rendered the redundancy process unfair.
The Council subsequently appealed the finding of unfair dismissal. Here, the Employment Appeal Tribunal (EAT) highlighted the distinction between a redundancy process in which employees are considered for alternative jobs and one in which employees are effectively applying for their old position. In the former case, it considered that a ‘forward-looking’ selection process (such as the use of competitive interviews) would be permissible; in the latter, however, a process of consultation and selection using objective criteria is necessary.
Given the claimants in this case were essentially applying for their old jobs, the EAT held that this was not so much a ‘forward-looking’ process, in which it would be acceptable to select for new roles based on perceived skills; it was more comparable to a traditional selection exercise where candidates are selected from within a pool.
Accordingly, the Tribunal’s finding of unfair dismissal was upheld.
Director of Legal Services
This is welcome confirmation that asking employees to reapply for what are effectively their own roles in a competitive interview process is unreasonable. It makes sense in many ways, as doing so effectively ignores all the evidence you have about their previous performance in favour of a one-off interview, which we all know can go badly and is a less than ideal way to judge a person. In that sense, using an interview process as an alternative to a selection exercise is almost inherently unfair.
If in doubt, seek advice
Redundancy can be a difficult and unsettling time for employees and a challenging process for employers to get right. If you’re facing a potential redundancy situation, our Employment Law specialists know everything there is to know about conducting a fair procedure are can guide you every step of the way so that legal complexities don’t lead to costly mistakes.