Redundancy testing

The Employment Appeal Tribunal (EAT) has held in Green v London Borough of Barking & Dagenham that the test in unfair dismissal cases by reason of redundancy is always the same even if the issue to be considered is why the employee was not appointed to a newly-created post as opposed to selection for redundancy.

Basic facts

Ms Green was employed by the London Borough of Barking and Dagenham as a Senior Regeneration Professional in the Regeneration, Economic and Development division, at level PO6 along with two other employees. As part of a restructuring exercise, the Council proposed to delete the three PO6 posts and create two roles for which the existing jobholders had to compete by way of a written test and interview.

The process involved a job matching stage, whereby if an individual scored more than 65 per cent with one of the new roles, they could be assimilated or slotted in, but if there were two or more employees placed, there would be a competitive ring fenced interview. Ms Green scored the lowest overall and was not therefore selected. By the time she was notified of the outcome of the process, however, she was out of time to lodge an appeal against the failure of the Council to assimilate her into another new role at a PO5 grade.

After being made redundant, she claimed unfair dismissal under section 98(4) of the Employment Rights Act 1996; and as the local trade union rep who had campaigned against the cuts, she also claimed automatic unfair dismissal by reason of trade union activities/membership under section 152 of the Trade Union and Labour Relations (Consolidation) Act 1992.

Tribunal decision

The Tribunal decided firstly that it did not need to follow the guidelines in the case of Williams v Compair Maxam, as this only applied when a defined number of existing post-holders in similar existing jobs are selected for redundancy from a pool, using objective and transparent selection criteria. This case, by contrast, was more about why Ms Green had not been appointed to one of the remaining positions, rather than selection for redundancy.

Following the decision in Morgan v Welsh Rugby Union, the tribunal held it had to keep in mind that an employer’s assessment of which candidate will be best suited to perform the role in the new restructure is likely to involve a greater element of subjectivity. It also noted the difficulty in appealing against redundancy selection when it has come about through competitive interview and testing. 

The tribunal rejected Ms Green’s claim on both counts, holding that her written exercise was poorly structured and although one of the other candidates was familiar with the project that the written test focused on, prior knowledge was not required. As for the failure to assimilate her into the PO5 job, she could have appealed against that decision at an earlier stage but chose not to. Nor was the tribunal convinced that her trade union activities had any bearing on how she had been marked in the assessment.

EAT decision

The EAT dismissed her appeal on the basis of automatic unfair dismissal, holding that the tribunal had properly engaged with the issues she had raised and was simply not convinced that trade union activities played on the Council’s mind when it dismissed her.

However, it upheld her appeal on the basis of unfair dismissal under section 98(4) ERA because, having decided that it did not need to determine fairness in line with the guidelines in Williams, the tribunal had appeared to rely on Morgan as though it laid down a rule of law, when in fact it made clear that it was directing tribunals back to the “touchstone” of section 98(4) “unvarnished”.

The question for the tribunal was whether the Council acted within the range of reasonable responses. As such, it should have considered whether the process involved in seeking to determine who would be best qualified and who had the most relevant abilities and skillset fell within the range of reasonable responses.  Similarly, the tribunal should have considered whether the process of selection - here carried out by means of an assessment and interview - was also fair.