In Northgate HR v Mercy the Court of Appeal has affirmed an EAT decision on two important issues which arose in the course of a redundancy exercise.

The employee was selected for redundancy from a pool of two. On the scoring criteria used, both employees ended up with the same number of points but Mr Mercy was then chosen for redundancy on the basis that he had less years’ service than the other candidate. Commenting on the selection procedure, the Employment Tribunal hearing the case said that it had noticed one glaring inconsistency: ‘the mark on the issues of the complainant’s capabilities in technical skills and project management was on the mean side but … it was not outside the band of reasonableness so as to indicate bad faith that itself would indicate an unfairness’. Accordingly, it considered that the dismissal was fair.

The EAT has now allowed the employee’s appeal. If a glaring inconsistency was found in the process then the Tribunal could not say that, just because there was no evidence of bad faith, the dismissal was fair. That part of his case was remitted for rehearing.

The employee had also tried to claim a protective award under the Trade Union & Labour Relations (Consolidation) Act 1992 (TULCRA) for failure to consult properly during the redundancy exercise in that the employee representatives at his workplace had not been given certain information in writing by the employer as required.

The EAT, and now the Court of Appeal, have decided that because of the wording of TULCRA there are some claims that only 'one of the employee representatives to whom the failure relates' could make (s.189(1) TULCRA). The employee reps had not complained about the lack of written information at the time and the individual employee could not do so now.

Points to note:

  • In the past, Tribunals considering the fairness or otherwise of a redundancy, have been content to satisfy themselves that the basic requirements of fairness have been met: adequate advance notice; proper consultation; objective selection criteria and the offer of alternative employment where available. However, in the case of Mercy the EAT is following a trend in recent cases in looking more closely at the detail of the process – in this case, seeing whether there has been fairness in the scoring system used when applying the selection criteria.
  • In view of the fact that the pool only consisted of two employees who had scored identical marks, the Employment Tribunal considered that ‘the best thing to have done would be to show the other man’s markings and to have discussed them fully with him [the claimant]’. This again goes beyond what has been required in the past to establish fairness.
  • An insistence on detail is in line with the decision of the EAT in Alexander v Brigden Enterprises which considered what information should properly be given to an employee in a redundancy case before ‘Step 2’ in order to comply with the statutory dismissal procedure and so ensure that the dismissal was not automatically unfair for failure to follow that procedure. In Alexander the EAT said that in redundancy cases the employer must explain why it has decided to make redundancies and why the employee is being (provisionally) selected for redundancy. Where the employer is selecting employees from a pool it will be necessary to provide details of the selection criteria and the employee's assessment under those criteria. The EAT held that it was not necessary to provide the assessments of other employees or the "break point" (that is, the mark which the employee would have to attain to avoid being selected for redundancy). However it did note that a failure to provide such information could make the dismissal generally unfair.
  • Employers should ensure that their own redundancy selection processes are robust enough to stand up to such an examination if they wish to avoid unfair dismissal claims.