A recent EAT decision has highlighted the ever-relevant issue of what constitutes a fair selection in a redundancy process. Not only that, the decision also highlights the risks involved for employers who fail to take due care when deciding what criteria to use when selecting certain roles/employees for redundancy.
It's a common scenario where an employer has several individuals doing similar work and they need to select one or more of these employees for redundancy. An employer may be liable to an unfair dismissal claim if they're seen to have unfairly selected an employee for redundancy, even in circumstances where they had a genuine need to make some redundancies.
The purpose of this article, therefore, is to outline for employers what considerations they need to take when deciding how they are going to select certain roles/employees for redundancy. We also cover the appropriate selection criteria which should be used.
When should a selection process be used?
Some redundancy situations may involve a standalone position where the employer may deal with one employee in the redundancy process. However, where there is more than one employee doing a similar job, it's likely that the employer may have to adopt a selection process that considers all such employees.
Why is a fair selection criterion so important?
It's an important consideration for employers to be aware that the risk of what could be deemed unfair selection criteria is ultimately a claim of unfair dismissal. Such as claim would be taken under the Unfair Dismissals Acts which states that a redundant employee may bring a claim of unfair dismissal on the basis that
A) Other employees should have been considered in a selection process.
B) That a selection process was used but that it differed from a previously agreed selection procedure.
C) The selection criteria used was unfair.
D) That the employee was selected on the basis of some discriminatory ground (e.g. age, race, religion, etc.).
Although it's one consideration in a redundancy process, the method of selection is crucial. If an employee successfully argues that they were unfairly selected for redundancy, they may be reinstated to their previous role. This would be on the same terms and conditions with back-payment of wages, re-engage them in a different role with different terms.
How can I ensure that I have adopted a fair selection process?
If you need to make a role redundant in a particular area, and you have identified that more than one employee does similar work, you'll need to ensure that the method of selection is fair. It's important to note that a resolution body will ignore job titles and look solely at the actual contents of the job, so whilst on the face of it an employer may feel that two or more employees carry out totally different roles, they need to look deeper into the actual job descriptions.
You will also have noticed that the term ‘roles/employees’ has been used above. This is crucial for employers to take account of as redundancy applies only where the role is redundant. Thus, it's the role that must be taken account of and as a result redundancy should not be used as a device to get rid of a troublesome employee. If redundancy was used to target particular employees then this would be deemed to be unfair selection by a tribunal body.
So what selection methods can a company adopt?
The Employment Appeals Tribunal (EAT) has considered all manners of selection and has overtime held that, depending on the circumstances, the following selection processes are acceptable:
1) Last in first out (LIFO).
2) Selection Matrix: Where employees are scored against a list of pre-agreed criteria encompassing levels of key skills held by employees. Other work-related matters such as disciplinary record, length of service, absenteeism, and punctuality are also considered.
3) Interview process: Employees are subject to a pre-agreed interview process in order to evaluate their skills and suitability for the remaining roles. It's important to note that whether or not any of the above three selection methods are appropriate will depend on the circumstances of each employer and the roles they wish to make redundant. The key consideration for employers whilst using any of these processes is to ensure that the criteria they use is objective and does not purposely or unnecessarily place one or more employees at an unfair disadvantage on the basis.
If an employer is considering a selection redundancy process, they must also be conscious of (A) any redundancy selection process they may have adopted in the past, or (B) any pre-set redundancy selection policy outlined in their Employee Handbook. If either (A) or (B) applies, then the employer may be obliged to follow the same policy that they adopted previously or outlined in their Handbook.
A recent case - Johnston -v- Floorwise (UD 1826/2010)
The above principles may be reflected in the recent EAT decision Johnston -v- Floorwise (UD 1826/2010). In this case, the employee was selected for redundancy on the basis of a behavioural and competency-based interview process. The EAT determined that “objective selection criteria are needed to carry out a proper redundancy procedure. There is no evidence that such procedure was carried out in this case. The purpose of those interviews with the sales team, including the claimant was unclear and lacked focus. Any procedures that did exist were unclear and lacked focus”.
It was ultimately determined that the claimant was unfairly dismissed and was awarded €31,000 in damages on the basis of unfair selection.
Conclusion
In conclusion, it's of paramount importance that when considering a redundancy situation employers have a sound and justifiable criteria for selection in order to avoid unfair dismissals.
The following principles may be applied by any employer to ensure that they are held to have unfairly selected an employee for redundancy:
- The employee’s position must be genuinely redundant.
- The employer must consider all employees who work in the same or similar positions.
- The employer must use objective, fair, and transparent selection criteria.
- The selection criteria used must be measurable.
- If there's an agreed or customary procedure for redundancy selection, the employer must follow that procedure.
- Where there's no agreed or customary procedure, any review will focus on the reasonableness of the selection criteria adopted.
- Employees must be made aware of the applicable selection criteria prior to the redundancy process commencing.
- Employees must have the opportunity to comment on how the selection criteria has been applied to them.
Need our help?
For further complimentary advice on fair selection from an expert, call us any time day or night on 0818 923 923 or request a callback here.
