Redudancy and suitable alternative employment

Posted on by mburn

In a recent decision, the EAT has overturned an Employment Tribunal’s decision of unfair dismissal because of inadequate consultation and subjectivity in the employer’s assessment of the Claimant for alternative employment.

In the case of Samsung Electronics (UK) v Monte D’Cruz, the Claimant worked in the Print division of Samsung as one of four senior managers. Samsung proposed to reorganize by combining the four roles into a single head of department position.  The Claimant applied for the Head position, but was unsuccessful.  He and another ‘at risk’ employee applied for a lower position of a Team Leader role.  They were both unsuccessful and an external candidate was appointed.  The Claimant was subsequently made redundant and claimed unfair dismissal

The Employment Tribunal ruled that redundancy was the reason for the Claimant’s dismissal, but that the dismissal was unfair on two procedural grounds: firstly the consultation had been inadequate and secondly that Samsung’s approach to alternative employment was flawed, particularly regarding the objectivity of the criteria used for assessing the Claimant’s suitability for the Team Leader role. The Claimant was awarded over £60,000 in compensation.

The EAT disagreed with the Tribunal’s view regarding the consultation and confirmed that Samsung had provided relevant and adequate information to the Claimant at appropriate points in the process.

In respect of the appointment process for the Team Leader role, the Employment Tribunal was critical of Samsung’s decision to assess the internal candidates against ten mostly subjective competencies that were normally used as part of the annual appraisal process, including creativity, challenge, strategic focus, simplicity, self-control/empowerment, crisis awareness, and continuous innovation.  Samsung used these criteria rather than the person specification of the new post and the Employment Tribunal considered them to be too subjective. The EAT found that, whilst best practice would be for an employer to tell the applicants what assessment criteria would be used and how these would be judged, failure to do so would not render the interview decision unfair. The EAT was satisfied that there is no obligation on an employer to limit themselves only to those factors that are capable of objective measurement in considering applicants for alternative employment.

This case shows the difference in approach that may be used when deciding on selection criteria for redundancy selection, and the criteria that can be used in deciding whether a candidate is suitable for an alternative role.  In order to be reasonable, the redundancy selection criteria should be both objective and measurable, and not based on someone’s personal opinion.  However, when an employee at risk of redundancy is being considered for alternative employment, an employer has reasonable flexibility when assessing his/her suitability for the new role. The EAT has confirmed that employers are permitted to use subjective criteria, provided the decision is made in good faith.

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