Fox Williams top tips on selection procedures for redundancy as a result of a business re-organisation following recent case law

It is a long established principle that when an employer is selecting employees for redundancy, the decision(s) should be based on objective criteria (Williams and others v Compare Maxam Limited (1982)). However, the recent judgment in Morgan v The Welsh Rugby Union suggests that it is fair for an employer to apply subjective criteria when deciding which of the potentially redundant employees should be appointed to a newly created, alternative vacancy.

Facts

Following a re-organisation of The Welsh Rugby Union (the ‘WRU’), the coaching roles held by Leighton Morgan (”LM”) and John Schropfer (”JS”) were scrapped and replaced with a new single post. The new post was offered to JS and the Claimant was made redundant.

LM brought unfair dismissal proceedings against the WRU, on the following grounds:

• JS had not met the job description and did not have the requisite qualifications or experience. LM contended that the WRU had ignored the applicants’ relative background and experience;

• the WRU had not followed the interview structure which it suggested it would do at the outset. JS was allowed to go over the prescribed time limit for the presentation and set out his plan and vision for the post as opposed to addressing the agreed topic. As a result, he was not asked the questions which were prepared for the applicants;

• the scoring system was amended during the selection process so that the presentation and the questions were not scored individually; and

• the decision to appoint JS was based on the subjective views of the interviewing panel which had no experience of coach development. The WRU suggested that the panel would include a coach but in fact did not.

The employment tribunal held that the dismissal was fair and the Employment Appeals Tribunal (the ‘EAT’) upheld the tribunal’s decision.

The EAT stated that the facts surrounding the Williams case had been different to those in Morgan. The Williams case concerned the process for selecting employees for redundancy from within a pool of existing employees, rather than the process by which a new, different role was to be fulfilled, following a re-organisation, as was the case in Morgan.

FW top tips

Following a review of the judgment, here are FW’s top tips for employers choosing which employee(s) to retain in a new role and which employee(s) to make redundant following a re-organisation of the business:

1.    Ensure that the process by which you appoint a person to a new role is fair and reasonable in accordance with section 98(4) of the Employment Rights Act 1996.

Although in Morgan the interview panel did not include a person with coaching experience, the panel was made up of extremely senior persons and had experience of making key senior appointments. Further, although JS was permitted to give a longer presentation than envisaged, the length of the overall interview process (presentation and interview) was broadly the same length for all of the applicants.

2.    Ensure that the decision is ‘forward looking’.

The employer should focus centrally on the ability of the applicants to perform in the new role.

3.    Pick the best person for the job.

Following a competitive interview process, an employer is entitled to appoint the applicant it considers to be best for the job, even if this is based on the subjective view of the panel. However, note that a tribunal may consider whether an appointment was made capriciously, or out of favouritism or on personal grounds.

4.    You may deviate from the job description if necessary.

In Morgan, the WRU was not bound to adhere to the job description and person specification ‘slavishly or precisely’. Although this provides flexibility to the employer, we suggest that this should be exercised with caution as it suggests that an employer cannot make a decision to employ a person for the newly created position who does not fall within the job description and/or person specification to such a degree as may be considered unreasonable. An employer should be careful to ensure that, if it employs someone with qualifications or experience outside of the job description and person specification, it has a good reason for doing so. In Morgan, the Respondent had a clear and substantial plan and vision for the post being created.

5.    Document the process clearly.

If there is a clear paper trail from the beginning to the end of the recruitment process, detailing the decisions made and the reasons behind those decisions, the employer will have a much stronger base from which to argue its case that it simply employed the best applicant for the job, if a dispute arises.

6.    There is no substitute for a completely objective process.

Tread this ground carefully. Morgan does not assist by laying down any guidance as to the extent the interview process for new roles should be objective. It simply tells us that as part of its deliberations, an employment tribunal may consider how far the interview process was objective, but that it should keep carefully in mind that an employer’s assessment of which applicant will best perform in a new role is likely to involve a substantial element of judgment.

A process by which all applicants are interviewed and scored using the same process, and the job description is adhered to, will result in the lowest risk of an employer facing an unfair dismissal claim from the redundant employee.