Redundancy

16 May 2012

Worthingtons Solicitors advise Employers in a redundancy situation on the importance of ensuring they comply with the legislation and the correct procedure in any selection process

In the current economic climate of the last number of years, redundancy has unfortunately been a reality for many companies.Employers finding themselves in a redundancy situation must ensure that they comply with the legislation and the correct procedure in any selection process.One aspect of this process is the consideration of suitable alternative employment.

A recent decision of the Employment Appeal Tribunal considered an interview process for suitable alternative posts and whether or not this process rendered the redundancy selection procedure and the ultimate dismissal by reason of redundancy fair or unfair under the current law. In the case of Samsung Electronic (UK) Ltd v Monte D'Cruz [2012] Mr Monte-D'Cruz worked in the print division of Samsung Electronics (UK) Ltd. Initially he was employed as Head of Reseller – Print, with responsibility for two business channels, office automation (OA) and IT. In January 2009 the employer split his role between the two channels and Mr Monte-D'Cruz became Head of OA Reseller therefore losing his responsibility for IT.  He was one of four Senior Managers who reported to the Head of Print.  In the Autumn of 2009 the employer initiated a further reorganisation and on 29 October informed staff individually that the four Senior Manager roles would be combined into a single position of Head of Sales – Print.This was to be followed by the creation of a number of new managerial roles. The Human Resource department wrote to Mr Monte-Cruz advising him that he was at risk of redundancy, that a redundancy consultation would end on 13 November and advised him to apply for the new senior role.  He was not successful in the application for the new senior role, however on 19 November a new structure was explained and all staff were given information packs which included the job specifications for all the roles.

Mr Monte-D'Cruz applied for the role of Business Region Team Leader which was, in his opinion, almost identical to what he had been doing as Head of OA Reseller.He was not successful in relation to this post and neither was the other internal candidate.When he queried this decision he was given feedback and encouraged to apply for other roles, however he did not and in January 2010 he was made redundant and he brought a claim for unfair dismissal in the Tribunal. The Tribunal found that Mr Monte-D'Cruz was redundant but the dismissal was rendered unfair on two bases: inadequate consultation and flaws in the selection process for the alternative role of Business Region Team Leader.He was awarded £64,722.The employer appealed.

The Employment Appeal Tribunal (EAT) stated that they found the meeting and letter of October were adequate in terms of consultation and disagreed with the Tribunal’s decision that it was “informing rather than consulting”.  The EAT held this was not a legitimate criticism and that giving information was the first stage in any consultation and that the employer had taken further steps. Mr Monte-D'Cruz was told not only what was happening and why but what his options were i.e. to apply for the new job and if unsuccessful to apply for one of the other two posts.In relation to the Tribunal finding that the appointment process for the alternative post of the Business Region Team Leader the EAT noted that the Tribunal is entitled to consider how far an interview process was objective but it should keep in mind that an employer’s assessment of which candidate will best perform in a new role is likely to involve a substantial element of judgement.

The EAT stated that it is good practice to discuss what approaches to be followed in any interview process, what they understand by any assessment criteria, and what would be good answers to the questions asked, a failure to take these steps will not of itself render the interview decision unfair.  The EAT went on to say that what assessment tools to use in an interview of this kind – which was not a redundancy selection exercise – was a matter for the employer’s discretion.If the tools used had been plainly inappropriate, that might have been influential on the issue of fairness of the dismissal, but that was not the case here.

Maxine Orr is a Partner specialising in Employment Law at Worthingtons Commercial Solicitors.

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