Making fair redundancies during covid means offering suitable alternative roles to employees, where they exist.
Due to the coronavirus pandemic, the unfortunate reality is that some employers must consider reorganising their businesses or making redundancies during the covid pandemic. In doing so, they must follow the correct processes. A recent EAT decision (Gwynedd Council v Barratt and Other) shows that failing to do so can result in unfair dismissal claims.
In this case, two employees at a primary school. A reorganisation meant that this school would close and a new school for ages 3 to 16 would open in the same location. The school told Staff that their contracts of employment would end and that if they wished to join the new school they would have to apply and be interviewed. Unsuccessful candidates would be redundant.
Importantly, the school did not consult with the employees (or their trade union) about the redundancy procedure. Although the roles at the new school were substantially similar to their old roles, the two claimants in this case were unsuccessful. Also, the employer didn’t let them appeal, breaching their contractual and statutory rights.
The Tribunal decided (the Employment Appeal Tribunal upheld the decision) that the school’s procedure had been unfair for the following reasons:
- The lack of consultation and lack of appeal
- Making staff “apply for either an identical job or substantially similar job”
- The unreasonable use of a competitive interview process
The EAT said that staff can be made to apply for new roles in two slightly different situations:
- Where the number of staff needed for a role is being reduced.
- Where the previous role is no longer needed, and a newly created alternative role is available.
In the second scenario, it is reasonable to adopt a competitive interview process. But this would not be reasonable in the first situation. For the first situation, the employer must place all the potentially redundant employees in a redundancy pool and make their decisions according to criteria, at least some of which are objective.
As this case fell within the first situation rather than the second, it was not appropriate or reasonable for the employer to use a competitive interview process.
Important lessons
When making redundancies during covid, employers should consult effectively with affected employees. When considering alternative employment for “at risk” employees, they should apply selection criteria to the pool of potential redundancies. In reorganisations, although an employer can use a competitive interview process, the need to consult “may remain relevant” depending on the particular facts.
It is easy to misunderstand what is needed for a fair procedure in redundancies and reorganisations. But employers must be careful to avoid unfair dismissal claims. The important distinction is that when an alternative role is substantially similar to one performed by redundant employees, a competitive interview process will not be appropriate.