The background to Mental Health Care (UK) Ltd v Biluan was that the management at a residential home had identified a need to close a ward, with 19 redundancies as a result. 58 staff were told they were at risk. Three criteria were applied: competency; disciplinary record; and sickness absence. But competency was weighted and the assessments on this element ultimately proved decisive.

Competency was assessed in three ways – written test, interview and a group exercise. These tests, which were conducted by the HR team and were designed for use in recruitment, were apparently deliberately chosen because there was thought to be insufficient information about past performance. No past appraisals came into the equation, nor were any line managers consulted. The results had been acknowledged by the managers to be “surprising” and to have led to the selection for redundancy of some “very good workers”, but they had not been revisited because the process was thought to have been “robust”.

Although the general rule is that selection criteria will be fair as long as they are objectively reasonable and it is irrelevant whether the tribunal thinks that some other method of selection would have been fairer, in this case the criteria fell outside the wide range of reasonable choices available to an employer and were therefore found by the Tribunal and the EAT to be unfair. The problem was the lack of reference to past performance, coupled with an over-elaborate procedure which made it difficult to show that the criteria had been applied consistently.