Unfortunately, the Covid-19 pandemic has resulted in many employers having to consider redundancies. The usual approach is to create a selection pool of employees in the same/similar roles and carry out a selection process to decide who to place at risk. However, sometimes employers place all employees at risk and ask them to interview for roles in the new structure.
This case is a reminder that the interview process is only appropriate where it is forward-looking to new roles. It is not appropriate where employees are effectively being required to reapply and enter competitive interview for their current post.
What does the law say?
Where an employer needs to make redundancies, the law requires a fair process to decide who will be placed at risk of redundancy. Failure to do this can give rise to unfair dismissal claims, and potentially awards of compensation to the employees affected.
What happened in this case?
Ms Barratt and Mr Hughes, the claimants, were teachers employed by Gwynedd Council to work at a local secondary school. The council decided to reorganise local schools, which included closing the secondary school and a number of local primary schools. The plan was to create a new school, based on the existing site.
Employees were told that their current contracts would be terminated and that they would be given the chance to apply for a place at the new school.
Both Ms Barratt and Mr Hughes applied for positions at the new school. They were interviewed but unsuccessful and therefore given notice that they were being made redundant. They queried the fact that they were not given the opportunity to make representations or appeal in respect of the decision to dismiss. The governing body said that no appeal would have been relevant because it could not overturn the council decision to close the old school.
The claimants both brought claims for unfair dismissal. The tribunal found that the redundancy process was unfair on a number of grounds. This included the lack of proper consultation, lack of appeal and the competitive interview process.
The school appealed the decision. The Employment Appeal Tribunal (EAT) dismissed the appeal and confirmed the finding of unfair dismissal. They found that some of the tribunal’s procedural comments were overly rigid, but that there were nevertheless serious procedural failings in the consultation. The fact that the council were definitely restructuring the schools in the area did not remove the consultation obligations. The EAT also said that there is no absolute requirement to give a right of appeal to a redundancy, but that failing to give one may be one element of dismissal being unfair overall.
On the key issue of interviews, the EAT said that competitive interviews were potentially an appropriate way to proceed. However, this would apply to a ‘forward looking’ restructuring. Where new roles are being created, an interview process may be an appropriate way to allocate those roles. It should not be used in a situation where employees are essentially being asked to reapply for their old job.
- In a redundancy situation, the safest way to select those to be placed at risk of redundancy is to use an objective selection matrix.
- Where the restructure is not a reduction in roles, but a more fundamental restructuring of the nature of each role, it may be possible to hold competitive interviews for the new roles. This will be most likely to be appropriate if the new role will require the employees to show skills they have not been able to demonstrate in their existing role (and where it would therefore be hard to select fairly using a selection matrix).
- Sometimes an employer is faced with decisions out of their control. In this case, the council had control of the decision to restructure the schools and the governing body of the school could not overrule them. Where this applies, employers should still carry out as much consultation as possible. Such a situation is not a defence to complete failure to consult.
- Employees who are dismissed for redundancy should be offered the chance to appeal. Failure to do so does not always mean the redundancy is unfair, but it will make it harder to show fairness.