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28 November 2008


Getting redundancy wrong

Redundancy is a hot topic in the present economic climate; and as the downturn kicks in, it is getting hotter. Ensuring that redundancy dismissals are fair is a complex business and getting it wrong can lead to expensive employment tribunal claims and the wrong kind of publicity. In the recent case of EZEC Limited v Gregory the company had operated what, on the face of it, seemed to be a fair procedure, but the employee succeeded in bringing an unfair dismissal claim, so where did it go wrong?
EZEC had decided that 4 employees from a pool of 14 were to be made redundant. Following the correct procedure, EZEC identified criteria upon which the employees would be ranked, with the four lowest scoring employees to be made redundant. In this case the criteria identified were: length of service, absence, sickness days, sickness occasions, discipline, performance, commitment and attitude, skill base and team working. The company’s first mistake was to fail to consult with the employees about the selection criteria before operating them.
The first five criteria were “objective” in nature and were correctly scored using information from personnel files such as sickness absence records. The remaining criteria were “subjective” which meant the manager who did the scoring was relying on his own opinion when scoring – always a dangerous situation. Whilst the use of subjective criteria is not fatal in itself, the manager’s mistake was not to refer to any marking guidelines or company documentation, or to talk to any other managers before completing the scoring. Inevitably the scores he came up with were open to question; and in the case of Ms Gregory, the fact that the scores could not be adequately explained actually made her selection unfair. The company’s final error was to reject Ms Gregory’s appeal without any attempt to find out if the scoring had been fair.
The failure to consult about the selection criteria and marking process, the failure to correctly score the subjective criteria and the failure of the appeal process to rectify these shortcomings all combined to make Ms Gregory’s dismissal unfair.
Everybody understands that redundancies are a sign of the times. But redundancy procedures must still be fair if employers are to avoid Employment Tribunal claims – particularly in times when there are fewer job opportunities available and redundant ex-employees may be more likely to scrutinise procedures looking for flaws upon which to base a claim.

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