Redundancy

Redundancy selection can be a tricky business; faced with having to choose between a number of employees how do you make sure you do so fairly? Well, the standard advice is to establish a set of objective criteria and apply those. And very good advice it is too, but Mental Health Care (UK) Ltd v Biluan & Anor shows that it is possible to go too far in the quest for objectivity.

In Lockwood Department of Work and Pensions, the EAT has endorsed the legitimacy of a voluntary redundancy scheme which provided enhanced benefits for older employees.

The claimant applied for redundancy at the age of 26, having worked at the DWP since she was 18: she was entitled to a redundancy payment under the Civil Service Compensation Scheme of nearly £11,000. However, if she had been over 35, she would have been entitled to over £17,000 more. She made a claim of direct age discrimination, but failed in the Employment Tribunal.

The EAT upheld the decision. There were material differences between the two groups – older workers would find it more difficult to find new employment and would have heavier family financial commitments than younger workers. The EAT also agreed that the different payments were justified, in that the different levels of payment were a proportionate means of achieving the legitimate aim of providing workers with a financial cushion to tide them over until they find another job – which would be harder for older workers.

Here is a list of the main new Employment Tribunal compensation maximum limits where the "appropriate date" (for example date of dismissal) is on or after 1st February 2013 (but note that the overall limit for compensatory awards in unfair dismissals may be changed soon) :-

Another new Supreme Court decision (Prudential plc & Anor, R (on the application of) v Special Commissioner of Income Tax & Anor) looks at the extent of legal advice privilege, and in particular whether parties to disputes can be ordered to disclose legal advice from advisers such as accountants.

In the continuing harsh economic climate, it is not uncommon for employers and employers to strike a deal whereby employees agree to work shorter hours, or take lower wages, to avoid being made redundant. Abercrombie & v AGA Rangemaster Ltd deals with just such a situation, and in it the EAT considers the relationship between such agreements and the right to a guarantee payment under Employment Rights Act 1996 (ERA) s28 if work is not provided for them on a day when they would normally work.

When advising on redundancy procedures, employment lawyers tend to emphasise that employers should take care to ensure that they use objective criteria when selecting from a pool of employees.  And very good advice it is too.  Mitchells v Tattersall, however, shows that this does not inevitable mean a box ticking exercise is required.

In Abellio London Ltd (Formerly Travel London Ltd) v Musse & Ors the EAT gives us a useful reminder that the right of employees to resign in response to a detrimental change of terms on a transfer of an undertaking is not restricted to changes in to their contractual terms. When a transfer takes place, and employees are not happy with it, they have two options.  They can inform either the transferring employer, or the transferee employer, that they object to becoming employed by the transferee, in which case, their employment ends without any dismissal – or any right to make any claim.  If, however, the transfer involves a substantial change to their working conditions which is to their detriment, they can resign, and will be treated as dismissed.

We recently reported on Capita Hartshead v Byard, which looked at a selection pool of one and found that a dismissal from such a restricted pool was unfair where an employer had not genuinely applied its mind to the question of what the pool for selection should be.

Consideration of alternative employment is a part of a fair redundancy procedure, and it is common practice for employees to be asked to interview for alternative jobs, competing against other internal and, sometimes, external applicants.

Readman v Devon Primary Care Trust is a reminder that, in a redundancy situation, the reasonableness of refusing a suitable alternative job should be judged from the perspective of the particular employee, rather than objectively.