As you know, for a redundancy dismissal to be fair, the redundancy process, including scoring the employee against selection criteria, must be reasonable. The scoring criteria should be objective – such as attendance record or score in appraisals - rather than subjective - such as "attitude". As part of a fair process, you also have to consider whether there is any suitable alternative employment available ("SAE") for the employee. The EAT case of Samsung Electronics v Monte-D'Cruz looked at whether it was reasonable for the employer to consider subjective factors in deciding whether to offer SAE.
The Claimant, Mr Monte-D'Cruz, was put at risk of redundancy by Samsung when it decided to combine four senior manager roles into a single head of department position. The Claimant applied for the new head of department position. When unsuccessful, he then applied for a newly created position of Business Region Team Leader, which was very similar to his former role. The criteria used for scoring the Claimant and the other internal applicants for both of these roles were ten competencies that Samsung regularly used in its annual assessment process, which were all of a subjective nature – including creativity, empowerment, customer focus and teamwork.
The Claimant was rejected for the role and Samsung decided to appoint an external applicant. The Claimant issued a claim for unfair dismissal.
The Tribunal held that the dismissal was unfair because:
- the consultation had been inadequate; and
- the employer would have been better to use a "person specification" to assess whom should have been offered SAE, rather than the "nebulous" criteria it chose to score against. The Tribunal also commented that the Business Region Team Leader was so close to the Claimant's former job that it would not have allowed anyone else to apply for it.
Samsung appealed to the EAT, who overturned the Tribunal's decision.
- Looking at whether the consultation had been adequate, the EAT disagreed with the Tribunal and found the consultation had been reasonable. It was not wrong for Samsung to tell the employees at the first stage of consultation that the reorganisation would take place. It was also reasonable for Samsung not to tell the employees the selection criteria it was sing before they interviewed for the role.
- Looking at whether the approach to suitable alternative employment had been reasonable, the EAT found the Tribunal had erred in its approach. It was permissible for the employer to use a substantial element of judgement in deciding who would best perform a new role, and to use criteria which, although they seemed vague to the Tribunal, had more meaning to Samsung. By saying that it would have been better to use a person specification, the Tribunal appeared to have drifted into the territory of substituting its own view for the employer's.
This case is good news, as it resolves conflicting case law and allows you more leeway over your selection procedure for SAE, including an element of subjectivity. Who says we are always the bearer of bad news?!
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
