Redundancy selection exercises – when not to use a competitive interview process
With so many businesses regrettably looking to make reductions in their workforce as a result of the pandemic, a recently reported case provides a timely reminder of the key principles to follow in a redundancy situation. In the case of Gwynedd Council v Barratt the EAT found that the dismissal of two teachers, who were required to apply for their own jobs following a reorganisation, was unfair.
The Council had decided to reorganise schools in the local area. It closed several primary schools, including that at which Ms Barratt was working, and combined them to form one new school. Rather than selecting from a pool of those affected, to determine which teachers would be made redundant, the council decided that the staffing of the new school would be decided by an application and interview process. Ms Barratt was effectively applying for her former job as a PE teacher in a new school on the site of her former school. She applied for the role but was unsuccessful. There was no consultation or right of appeal. She was subsequently made redundant and brought an unfair dismissal claim.
A tribunal found her dismissal unfair because she had not been consulted, had not been offered a right of appeal and because of the way in which she was required to apply for and be interviewed for her own job. The tribunal held that “threatening to dismiss staff and compelling them to apply for their own jobs or similar jobs ignores years of jurisprudence on dealing with potential redundancy situations”. The tribunal concluded that this was outside the band of reasonable responses. Gwynedd Council appealed arguing that the tribunal had applied the case law guidelines on redundancy process too rigidly.
Dismissing the appeal, the EAT held that where the application process relates to the same or substantially the same job this does not involve “forward-looking” criteria, but something closer to selection from within a pool, requiring the teachers to apply for their own jobs was unfair. The EAT pointed out that consultation will still be required where a redundancy process requires employees to undertake competitive interviews for new roles.
This case reminds us that although application-based selections for redundancy can be a very effective way of restructuring, the exercise does need to be carefully planned. If there is no change to the role, such that the employee is simply applying for their own job, it is more likely to be appropriate to select candidates from a pool. Even if it is appropriate to be using an application process, the fact that the existing role is being made redundant does mean that consultation will need to be carried out. As this case demonstrates, if an employee has not succeeded in securing the ‘new’ role and there has not been an appropriate the employer is unlikely to be found to have followed a fair process.
There are a variety of approaches to designing fair and effective restructuring and redundancy exercises. Detailed planning is essential in avoiding the risk of the process being found to be unfair, which could give rise to claims including unfair dismissal. We have many years of experience of assisting clients with complex restructuring cases and are always available to advise on designing a process which will minimise the disruption and risk caused to your business.