Making staff
redundant does not really represent a pleasant occurrence for employees, but
for employers as well; an employer triggers this process when the organization
is experiencing particularly severe economic hardships and more in general when
this has failed to effectually face the competition.
From the legal
viewpoint, managing the process is everything but straightforward in that for
employers the risk of falling into a series of pitfalls is rather high. The
procedure becomes even trickier when employers have to decide whom to make
redundant amongst a number of different individuals, especially whether some new
jobs are created within the business as a result of an internal reorganization.
A recent case discussed before the Employment
Appeal Tribunal (EAT) in London (Morgan v The Welsh Rugby Union
UKEAT/0314/10/LA) can definitely provide employers valuable insights and
suggestions on how to manage the process.
The case was brought
before the Court of Appeal by a rugby team coach manager, who claimed of having
been unfairly dismissed after having applied for a new position created within
the Welsh Rugby Union as a result of an internal reorganization, which implied the
positions of Elite Coach Manager and Community Coach Manager to disappear and a
new senior role to be created. Both the incumbent Elite and Community Coach
Managers applied for the new post, but since the role could be filled just by
one person the unsuccessful applicant should have necessarily been made
redundant. As the employer had also received an external application for that
post, there would have been indeed chances that both of the internal candidates
might have been made redundant.
The job was finally
offered to one of the internal candidates, but the other, that is to say the
claimant, decided to bring the case in front of the Employment Tribunal complaining
that the selection process had been unfair. After his claim was rejected by the
ET, Mr Morgan brought the case before the Employment Appeal Tribunal, which rejecting
the claim of unfair dismissal essentially upheld the ET decision. The Tribunal recognized
that there had actually been some differences between the claimant and his
colleague selection process structure; notwithstanding, this deemed that by and
large both procedures had actually been objective and fair.
The events which
gave rise to this case can be identified and summarized as follows:
1. A reorganization
planned by the Respondent caused the suppression of two positions existing
within the organization and the creation of a new senior position;
2. The job holders
of the suppressed positions applied both for the new role;
3. One of them
should have necessarily been unsuccessful and consequently made redundant;
4. Despite the
Respondent had prepared a job description and an interview plan linked to a
scoring system, this not completely stuck to these during the selection process.
The Claimant did not indeed bring the case
before the Court by reason of having been dismissed for redundancy, but rather
in that this considered the selection process executed by the Respondent as lacking
of objectivity and fairness, which accounted for his dismissal to be in his
viewpoint unfair. The most relevant aspect of this case, on which is based Mr
Morgan’s claim, relates hence to the mechanism of the selection procedure, or
rather, to the different selection approach adopted by the employer for the
different candidates.
The Committee in
charge of the selection process was exclusively formed by senior officials: the
Chairman, the Head of the Finance Committee, the Head of Game Policy Committee
and a coach who could not take part to the selection activities.
For the new senior position
were formulated both a job description and the person specification. Amongst
the qualifications required to fill the post was indicated that the person should
have been "qualified to at least WRU Level 4 or equivalent" and should
have had "an established reputation of developing elite coaches within the
field of coach education."
As for the
selection process, applicants were told that the interview would have included
a 10-15 minutes presentation on a specific coaching subject and a number of
preset interview questions. A scoring system was also set out.
As the matter of
fact, however, the committee not only did not respect the interview
questionnaire system, but did not stuck to the job description which had been
prepared either, on account of these not being prescriptive.
Despite the job description
listed amongst the requirements needed to properly fill the post a
qualification to WRU Level 4, the appointed person had a WRU qualification at
level 3, whilst the Claimant, with a WRU qualification at level 5, was basically
exceeding this specific requirement. Yet, whereas the Claimant had substantial
recent experience of training elite coaches, the appointed person did not have
any such experience at all.
According to the
Claimant’s representative whether the Respondent would have performed a structured
comparison between the Claimant and his colleague’s skills and abilities, the
Claimant would have clearly emerged as the best fit. The decision to appoint
the other candidate was hence inappropriate in that the Respondent: a) did not
adhere by any means to the content of the job description, b) overlooked the
different level of experience, c) made the final decision in the absence of an
expert coach, d) allowed one of the candidates to considerably exceed the time
limit set for the presentation and e) did not even consider the scoring system
it had arranged for the interview.
The Tribunal
concluded, by contrast, that the Respondent did not neglect the experience of the
candidates. Despite the claimant had “on paper” the required coaching experience
and qualifications, the selection procedure implemented by the employer was not
purely paper based. Nonetheless, the appointed candidate seemed to impress by
majority the committee during his presentation.
This decision may be actually considered dubious
in that Mr Morgan not only had the qualifications but also the elite training
experience which the appointed person did not actually have. Eventually, it was
just on paper, or “on slides”, that Mr Schropfer showed his vision of how to
carry out the new role and yield results.
The Tribunal also
claimed that from Mr Schropfer curriculum vitae it clearly emerged that this fulfilled
the criteria listed in the job description and that the Respondent was “in a
very good position” to assess whether this was suitable for the new role and acted
reasonably when interviewed this. In the absence of any evidence of bias,
capriciousness or partiality, the Tribunal concluded that the appointment of
the selected candidate was reasonable and fair, and that it not caused any detriment
or prejudice to the Claimant.
As for the
committee composition, albeit the Tribunal considered regrettable that no
coaching expert was participating in the selection process, this acknowledged
that the committee was composed of extremely competent members with proven
experience of senior appointments. The absence of a member with coaching
expertise was, according to the Tribunal, a circumstance which affected both
candidates equally, without any specific prejudice to the Claimant.
The Tribunal was satisfied that the Respondent
had developed a fair interview process and, albeit the committee did not
strictly adhere to it, deemed by majority the interview process as fair. The Court
considered that the circumstance the committee did not operate the scoring
system it had devised and allowed one of the candidates to give a presentation lasting
longer than scheduled could not be regarded as having caused any prejudice to the
Claimant. The selection process was thus objective and could be judged neither
capricious nor favoring one of the candidates.
In conclusion, the
Tribunal by majority deemed the selection process rigorous and appropriate. The
question for the Court was whether this met at least some criteria of fairness
and the Tribunal finally found that it did. The overall length of the
interviews was broadly the same, each lasting about one hour and notes of the
interviews were recorded by the panel members on the interview assessment
sheets and questionnaires. Despite differently from originally planned, a
scoring system, which the Tribunal judged fair and objective, was adopted. The
employer management met sufficient criteria of fairness as to render the
process fair and reasonable so that the Tribunal did not accept the Claimant's
submission and dismissed his claim of unfair dismissal.
The final judgment pronounced
by the Tribunal may be considered questionable by many HR Professionals. In
essence, the Tribunal aim was that to determine whether the process and most of
all the final decision made by the committee to appoint Mr Schropfer was fair
or otherwise.
The key statutory
provision applied by the Tribunal was hence section 98(4) of the Employment Rights
Act 1996, which provides for the determination of the question whether the
dismissal is fair or unfair (as regards the reasons given by the employer) to
be judged on the basis of two different aspects, to wit: a) On whether in the
circumstances (including the size and administrative resources of the
employer's undertaking) the employer acted reasonably or unreasonably in
treating it as a sufficient reason for dismissing the employee; b) whether the
decision has been made “in accordance with equity and the substantial merits of
the case."
The main task of the Tribunal was hence to
access whether the Respondent acted reasonably and fairly under the
circumstances, rather than to determine whether the selection process had been managed
as planned. The Tribunal by majority considered that the Respondent did not
have to exactly adhere to the job description and the EAT held that by doing so
the Tribunal did not committed any error of law. In the EAT view there is in
fact no rule of law requiring that employers must slavishly adhere to job
descriptions or person specifications; employers are entitled to interview
internal candidates even though they do not exactly meet the job description
and are entitled to appoint, at the end of the selection process, the candidate
these consider to be the most suitable to fill the role.
This view is, at
least in general, debatable. Inasmuch as at times job descriptions are
overloaded with requirements which is even impossible that candidates might
ever met, once a candidate met all of the requirements listed in a job description,
it can be hardly accepted that these become irrelevant. The view of the
Tribunal is that when making decision about the most suitable employee to appoint
for a new role, a reasonable employer should operate a selection system which
has to be objective and capable of enabling this to make decisions which cannot
be intended as capricious or arising out of favoritism for one candidate over
another on personal grounds.
In Ball v Balfour
Kilkpatrick Ltd (EAT/823/95), the Judge said: “that there is no rule of law
that selection criteria must be exclusively objective.” Citing a different case,
the Judge added that “It is clear on the authority of Akzo Coatings Plc v
Thompson and Others [1996] EAT that the touchstone in such a situation is
reasonableness rather than the application of either agreed selection criteria
for redundancy or the application of objective criteria.” In many court cases, namely:
Akzo Coatings v Thompson, Ball v Balfour Kilpatrick and Darlington Memorial
Hospital NHS Trust v Edwards & Vincent the Judge reached the conclusion
that it is wrong considering similar the criteria used to select a person for
redundancy to those used to appoint a person for alternative employment.
However, in Ralph Martindale & Co. v Harris (UKEAT/0166/07/MAA), referring
to the case Darlington Memorial Hospital NHS Trust v Edwards & Vincent, the
Judge held that in any circumstance a selection process must at least meet some
criteria of fairness. In this instance, which in many respects could be
considered similar to the case Morgan v The Welsh Rugby Union, no job description
was actually prepared. The selection process was conducted in an “entirely
subjective way” and the interview had no influence on the final decision, which
was made by just one person. The Tribunal hence found that “the process adopted
was not reasonable, and that in consequence the claimant was unfairly dismissed.”
Once again, the main point is fairness or unfairness, reasonableness or unreasonableness.
In Ralph Martindale
& Co. v Harris emerged that employers, which need to select one or more individuals
amongst redundant employees for a new role, have to develop an objective system
capable to prevent the possibility that the final decision might be seen as
capricious or arising out of favoritism on personal grounds, which was
actually what the Court aimed at determining in Morgan v The Welsh Rugby Union.
Another interesting
aspect emerged in Ralph Martindale & Co. v Harris; the Tribunal did not
consider opening a new role to the entire workforce, when there are redundant
employees, an approach to current industrial relations practice typical of a reasonable
employer. Despite an employer may consider that none of the redundant employees
is qualified or have the required capabilities to properly fill the new role,
before opening this to the entire organization workforce this should assess and
ensure beforehand that none of the redundant staff is suitable for this.
In Morgan v The
Welsh Rugby Union, as stressed several times by the Judge, the decision was made
by majority; regrettably, the Tribunal did not set out the views of the other members.
It would have been good practice and useful indeed doing this (see, for
instance, Anglian Home Improvements v Kelly [2004] IRLR 793). However, this
departure from good practice is not and cannot clearly be considered as a good
reason for appeal.
Longo, R., (2011), Fair and unfair redundancy dismissal; HR Professionals, [online].
