MD of Pharos Legal, Natalie Saunders, has been identified by Yorkshire Business Insider magazine as one of Yorkshire’s top “42 under 42” trailblazing entrepreneurs! Take a look here.
We also held a very well-attended seminar, with fabulous feedback, with Linked2Success at our office on 1 March, focusing on how to use social media to build your business (but protect your brand, reputation and business against misuse). If you missed it this time round, never fear, as we will be running more sessions later this year. Please do get in touch if you'd be interested in attending.
Redundancy: at last, some employer friendly decisions...
Back to business, in view of the economic climate and the continuing need for businesses to reorganise and restructure, we focus in this month’s Beacon on recent tribunal developments in the area of redundancy – an area in which we’re doing quite a lot of work at the moment.
It does seem as though the Employment Appeal Tribunal (EAT) is taking a more pragmatic approach in the decisions set out below. It appears that they are now coming to understand the effect that these tough economic times are having on employers.
Suitable Alternative Employment - "subjectivity" is no longer a dirty word!
The EAT has decided that an employer can appoint the "best person for the job" (even if this involves some subjectivity) where, following a reorgansation, a redundant employee is invited to apply for a newly created role.
In Samsung Electronics -v- Monte D'Cruz, the Claimant was one of three Heads of Department in the print division. They were informed that their roles would be abolished and merged into a new, single position of Head of Sales.
The Claimant applied for the new post and was assessed on his presentation skills and a scoring system based on the annual appraisal system. He was unsuccessful.
He also applied for a more junior role which arose out of the restructure. He was also unsuccessful and the position was filled by an external candidate.
The employment tribunal held that the dismissal was unfair because there was inadequate consultation and the selection criteria for the new roles was too subjective.
The EAT reversed the tribunal's decision and found as follows:-
(Reference should also be made to the EAT's decision in Morgan -v- Welsh Rugby Union [2011] IRLR 376 in which the EAT helpfully stated that "an employer's assessment of which candidate will best perform in a new role is likely to involve a substantial element of judgment" (our emphasis)).
It should be noted that the EAT still examined the interview process to satisfy themselves that there was a degree of objectivity, demonstrating that a balanced approach is still required.
A Pool of One - tribunal interference is unlikely!
The EAT has upheld a tribunal's decision that, in circumstances where the Claimant was found to constitute a "pool of one" (given his unique position), he had been fairly selected for redundancy.
In Halpin -v- Sandpiper Brooks, the Company employed Mr Halpin in its London office. He was then transferred to China to work in a sales role. The Company then decided to outsource the sales role and put Mr Halpin at risk of redundancy.
Extensive consultation took place. Mr Halpin was offered (and refused) alternative employment in the UK. He was dismissed by reason of redundancy and brought an unfair dismissal claim.
The tribunal's decision that he had been fairly selected and fairly dismissed was upheld by the EAT. In summary, the EAT said that a decision by an employer to limit the pool to one cannot easily be overturned by the tribunal.
They commented that "selection only operates, when fairness is concerned, where there is a number of similarly qualified possible targets for redundancy". In the circumstances, the decision taken was one that was reasonably open to the Company.
That sounds fair enough – but then just to keep things interesting there’s the case below…
A Pool of One – interference unlikely but not impossible!
In Capita Hartshead Ltd v Byard the EAT upheld a tribunal's decision that a dismissal following selection for redundancy from a pool of one was unfair. So whilst employers can take some comfort from the Halpin case above, it is still easy to get the pooling issue wrong.The Claimant was an actuary and no longer had enough work for a full-time role as many of the pension schemes she worked on had either been wound up or the clients had been lost. Although there were three other actuaries, she was put into a redundancy selection pool of one because there was a risk of losing clients if they were transferred between actuaries. Unsurprisingly, she was selected for redundancy. She claimed unfair dismissal and argued that all four actuaries should have been included in the pool.
The majority of the tribunal agreed and found that the Company’s decision to limit the size of the selection pool to the Claimant was unfair given that the risk of losing clients from reassigning actuaries to pension schemes was 'slight'.
The EAT agreed and helpfully set out the applicable principles in unfair dismissal claims when assessing whether the correct redundancy selection pool has been used:
