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Competency-based selection for redundancy criticised by EAT

Employment Law & HR
BG Purple

The Employment Appeal Tribunal (EAT) has been heavily critical of an employer for putting “blind faith in process" during redundancy consultations and accused it of losing touch with common sense and fairness. 

The employer, Mental Health Care (UK) Ltd, ran a residential hospital for patients with mental health illnesses. When it was forced to close a ward, 58 staff were placed at risk of redundancy with a view to losing 19 employees. Instead of operating a traditional selection matrix to select staff for redundancy, the human resources department devised an unusual competency-based selection process normally used in the context of recruitment. 

The process was created by HR with no input from employees or their managers and did not take into account past appraisals. It emerged that the employer had concerns over its appraisal process and did not feel that there was sufficient reliable material available to assess staff on that basis. Despite recognising that the competency based-process had the “surprising” effect of selecting good staff for redundancy, the employer pressed ahead, convinced that the competency process was fair and robust. 

Both the employment tribunal and the EAT held that the resultant dismissals were unfair. It is worth noting that the EAT did not find that departing from traditional selection methods was inherently unfair. However, it highlighted that any such departure should be treated with care. In this case the employer, recognising that there were weaknesses in its appraisal system, took great care in devising a system which it thought was robust. However, in reality, it was clear that the results were dubious and at that point the employer should have re-evaluated the process rather than blindly following process at the cost of common sense.

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