02 February 2009

Employment news: Careful selection

Lisa Lewinsohn
Senior Associate | UK

In these times of widespread redundancies it is wise to take heed of judgments that consider the requirements for a fair redundancy dismissal. An example of how an employer fell short of what is required to conduct the process fairly can be found in the recent judgment of the Employment Appeal Tribunal (‘EAT') in E-Zec Medical Transport Service Limited v Gregory, where the EAT upheld a tribunal's decision that the dismissal of an employee on grounds of redundancy had been unfair.

E-Zec employed Ms Gregory as an administrator and ambulance driver. Business declined and E-Zec responded by proposing a restructuring at Ms Gregory's workplace. It made an announcement to staff on 27 November 2006. Two employees successfully applied for vacancies at other sites and various others applied for voluntary redundancy. This left the company needing to make four compulsory redundancies from a pool of fourteen. The selection process was managed by the senior HR manager. Nine selection criteria were proposed: service; absence; sickness days; sickness occasions and discipline (based on data in the personnel files); performance; commitment and attitude; skill base and team working. The senior HR manager gave marks in the first five categories and the regional manager, Mr Dean, marked the others, basing his scores on his experience of having worked with the employees in the pool. Ms Gregory was then called to a meeting, told the marks she had been awarded and given a letter confirming that she was at risk of redundancy. This was followed by a further meeting at which she was given a letter confirming her dismissal.

Ms Gregory brought an unfair dismissal claim to the employment tribunal on the basis that the employer had not consulted with the union about the selection criteria or selection process; that she had not been given proper opportunity to consider alternative employment; and that the marking by Mr Dean had been subjective and unfair. The tribunal agreed that these factors made the dismissal unfair and refused to accept the employer's argument that it had cured the problem by offering Ms Gregory an appeal.

The EAT agreed with the tribunal and rejected the employer's appeal. It held that the tribunal, which had made it clear that it was not subjecting E-Zec's marking system to a microscopic analysis, had been entitled to satisfy itself that a fair system had been in operation and to conclude that the selection process had been outside the band of reasonable decisions. Mr Dean had acted alone without feedback from others and could not point to any documents to back up his judgments such as performance appraisals or even notes of his own thought processes. The EAT also upheld the tribunal's decision that there was not even a possibility that dismissal would have occurred had a fair procedure been followed.

The case is a timely warning to employers that implementation of a subjective marking system without prior consultation may well lead to a finding that a dismissal by reason of redundancy is unfair. It reminds employers to ensure that consultation takes place in relation to the redundancy selection process and to take particular care that scores that are awarded in respect of selection criteria are justifiable and substantiated by documentation and the input of relevant managers. Further, the reasoning behind the scores awarded should be recorded. Such steps both make the early internal resolution of queries and complaints more likely and, if litigation ultimately ensues, will assist a company in persuading a tribunal that a dismissal was fair.

What do tribunals expect of employers?

In a 1982 case, Williams v Compair Maxam Ltd, the EAT set out some guidelines for employers that are still applied by tribunals today:

  1. The employer will seek to give as much warning as possible of impending redundancies so as to enable the union and employees who may be affected to take early steps to inform themselves of the relevant facts, consider possible alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere.
  1. The employer will consult the union as to the best means by which the desired management result can be achieved fairly and with as little hardship to the employees as possible. In particular, the employer will seek to agree with the union the criteria to be applied in selecting the employees to be made redundant. When a selection has been made, the employer will consider with the union whether the selection has been made in accordance with those criteria.
  1. Whether or not an agreement as to the criteria to be adopted has been agreed with the union, the employer will seek to establish criteria for selection which so far as possible do not depend solely upon the opinion of the person making the selection but can be objectively checked against such things as attendance record, efficiency at the job, experience, or length of service.
  1. The employer will seek to ensure that the selection is made fairly in accordance with these criteria and will consider the representations the union may make as to such selection.
  1. The employer will seek to see whether instead of dismissing an employee he could offer him alternative employment. 
Lisa Lewinsohn Senior Associate | London

Category: Article