Redundancies continue to feature as a sign of the times. As ever, it is easy to trip up without careful planning and implementation.
A tribunal cannot simply substitute its own view as to what the redundancy selection pool should be, it must decide whether the employer's choice of pool is within the range of reasonable responses (Wrexham Golf Club v Ingham). A tribunal is nonetheless entitled to be satisfied that the employer did genuinely apply his mind to the issue of who should be in the pool. Where an employer has genuinely applied its mind, it will be difficult for an employee to challenge the pool (Capita Hartshead v Byard).
Redundancy selection criteria should, as far as possible, be objective and capable of independent verification. This means that the criteria should be measurable, rather than just being based on someone's personal opinion. Having said that, just because selection criteria involve a degree of judgment, does not mean that they cannot be assessed in a dispassionate or objective way. It is not simply a box ticking exercise (Mitchells of Lancaster v Tattersall).
Suitable alternative employment
While redundancy selection should be based on objective criteria, this principle does not extend to deciding who should be appointed to an alternative vacancy. An employer is entitled to undertake a competitive interview process and appoint the candidate it considers to be best for the job, even if this is based on its subjective view. It simply needs to act fairly and reasonably (Samsung Electronics (UK) Ltd v Monte-D'Cruz).
On the other hand, an employer may want a redundant employee to take a suitable alternative position. An employee who unreasonably refuses such an offer loses their entitlement to a redundancy payment. In Readman v Devon PCT, the EAT reminds us that while a tribunal will 'objectively' assess whether a job offered amounts to 'suitable alternative employment', the test for whether the employee reasonably refused it is 'subjective'. An employee can refuse a suitable post provided they are acting reasonably.
Is this a redundancy situation?
Under the Employment Rights Act 1996, an employee is dismissed by reason of redundancy if their dismissal is wholly or mainly attributable to the fact that their employer's requirements for employees to carry out work of a particular kind have ceased or diminished, or are expected to do so.
- Scenario 1
Following a downturn in business and introduction of new software, the employer's need for a book-keeper is greatly reduced. As a result, the employer wishes to impose a significant cut in hours. Can she claim redundancy? In Packman v Fauchon, the EAT say 'yes', it is not always necessary to have a reduction in the actual number of employees carrying out work of a particular kind in order to satisfy this definition of redundancy. In circumstances such as these, reducing the amount of work to be done by the same number of employees could give rise to a 'redundancy situation'.
- Scenario 2
You employ B on a fixed-term contract to provide cover while A (the person normally in post) is on a two-year secondment. When A returns, can B claim a redundancy payment? In Greater Glasgow Health Board v Lamont, the Scottish EAT said no. Such a scenario was held not to be a redundancy situation as the requirement for the post itself had not ceased or diminished: one employee was required to carry out the work before B's fixed term contract expired and one was still required thereafter.