On appeal: Selective redundancies

Continuing our series on the implications of recent significant cases,
Anthony Korn, a barrister at 199 Strand Chambers, looks at the issues

Selective redundancies
Alstrom Traction Ltd v Stephen Birkenhead and others (2002) EAT/1131/00

With the economic downturn, redundancies are likely to figure again on the
HR agenda in the coming year. The EAT’s ruling in Alstrom Traction Ltd v
Stephen Birkenhead and others (2002) EAT/1131/00 is a useful example of the
dangers that can arise where employers use a scoring process for redundancy
selection. It also clarifies the status of previously decided case law in this
area.

Birkenhead and the other complainants were among 100 members of staff made
redundant by the company in 1999 as a result of severe trading difficulties.

Prior to the redundancy, there had been collective consultation with the
unions, but no agreement could be reached on the selection criteria to be
applied. The employers decided selection would be based on: attendance, time
keeping, length of service, accuracy of work, co-operation, job flexibility and
versatility.

The assessments of Birkenhead and the other complainants were carried out in
March 1999 by their line managers, whose assessment was subjected to a
two-stage process of validation. The staff played no part in this process.

After the assessments had been completed, Birkenhead and the other
complainants received letters saying they were "at risk" of
redundancy. They then attended a "consultation" meeting at which they
were given their total assessment scores, without a breakdown of the scores, or
the opportunity to challenge them.

There was then a second "consultation" meeting, where they were
told their redundancies would be confirmed. Following an unsuccessful appeal
against their dismissal, Birkenhead and the other complainants brought
proceedings for unfair dismissal.

The employment tribunal upheld their complaints. It found the first
consultation was the only opportunity the complainants had to challenge their
scores, but, on that occasion, they were not given the chance to challenge the
assessors with regard to the scoring system or the marks awarded. Therefore,
their initial selection was flawed.

The tribunal was also not satisfied that "an independent process was
set up under the appeal system to allow the employee a fair hearing on
appeal", because although the assessment scores had by then been
disclosed, the complainants’ representative had not been given an opportunity
to question the assessors or to assess the material on which their decisions
had been made. The complainants, therefore, never "knew the full case
against them".

On appeal, the company argued that the tribunal had placed far too much
reliance on the case law which had been cited to them, particularly in relation
to the issue of whether the appeal amounted to a review or a rehearing. It was
argued that, as a result, the tribunal had lost sight of the fundamental
question posed by the statutory provisions – namely, whether the dismissal was
fair in accordance with the rules set out in Section 98(4) of the Employment
Rights Act 1996.

EAT decision

Dismissing the appeal, the EAT ruled:

– The tribunal had not attached too much importance to the ‘guideline’ legal
authorities which it had referred to in its decision on the issues of
consultation and a fair appeal process

– The tribunal, in reaching its conclusions, had applied the statutory test
of fairness posed by Section 98(4) of the Employment Rights Act 1996, and was
entitled to refer to the case law in applying the statutory test.

Key points

In redundancy selection cases, staff should be consulted on their
redundancy assessment before they are selected for redundancy and should be
provided with the evidence on which those assessments are based

– There should normally be a direct meeting between the person who carried
out the assessment and the person assessed in much the same way as there would
be in any appraisal process

– Where this does not take place as part of the original selection process,
it should take place at the appeal hearing.

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