In the recent case of Green v London Borough of Barking & Dagenham the Employment Appeal Tribunal (EAT) held that the application of s.98(4) Employment Rights Act 1996 (regarding the fairness of an employer’s reason for the dismissal of an employee) is not modified in the case of redundancy, where employees subsequently compete for newly-created roles within the same organisation.

Facts

The Claimant was employed by the Respondent from August 2008 until her termination in July 2014. In October 2012, the Respondent had started to undertake a process of restructuring and redundancies. At the time, the Claimant was one of three individuals performing a broadly similar role for the Respondent. The Claimant’s line manager proposed a restructure of the Claimant’s team which included the deletion of the three roles and the creation of two such posts for which the existing three jobholders would compete by way of an unseen written test and interview. The Claimant scored the lowest of the three individuals in these tests and was not offered a new role.

The Claimant alleged that the recruitment process was unfair as one of the other candidates had prior knowledge of the subject matter of the written portion of the test. She also alleged that her appeal against dismissal had not properly considered this and other matters that she had raised.

The employment tribunal (ET) held that it did not need to determine the fairness of the Claimant’s dismissal and therefore need not apply the guidance laid down in Williams v Compair Maxam. The ET judged that the question before it was why the Claimant had not been appointed to one of the new roles, rather than why she had been selected for redundancy in the first place.

The ET judged the Claimant’s case more akin to Morgan v Welsh Rugby Union. In Morgan, the EAT had distinguished Williams on the basis that appointment to new roles after a restructure may involve a substantial element of judgment on the part of the employer. For the purposes of this case, the ET considered this to mean that it was prevented from properly applying s.98(4). The ET dismissed the Claimant’s claims of automatic unfair dismissal and unfair dismissal for the purposes of s.98 Employment Rights Act 1996.

On appeal the EAT held that, in adopting this approach, the ET had elevated the finding in Morgan to a proposition of law, which it expressly had not laid down. It had, further, adopted an overly narrow approach to s.98(4) and failed to demonstrate that it had reviewed each stage of the Respondent’s decision making process, including why the Claimant was initially selected for dismissal. The case was therefore remitted.

Comment

This case demonstrates that s.98(4) should always be the first port of call for ETs when considering dismissals. In redundancy and restructuring situations, the decisions made by employers at each stage of the process must therefore be fully scrutinised and reviewed.