Inappropriate Redundancy Selection Criteria

Inappropriate Redundancy Selection Criteria

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Employers intending to make redundancies can find themselves exposed to unfair dismissal or, more seriously, discrimination claims if they fail to take proper care in the selection of the specific employees to dismiss. Selecting an employee for redundancy on the basis of inappropriate and/or wholly subjective selection criteria can leave the employer exposed to and unable to defend against discrimination claims from the employee. This was the situation Abbey National (part of the Banco Santander Group) had got itself into in the landmark case of Chagger v Abbey National plc & Hopkins of 2006 in the UK where, amongst other factors, inappropriate redundancy selection criteria contributed to the Employment Tribunal's finding of race discrimination, which, following Abbey National's refusal to comply with the Tribunal's order to re-instate Mr Chagger, subsequently led to the record compensation award of £2.8 million. The case provides important references for the selection of employees for redundancy.

Balbinder Chagger was of Indian origin. He was employed by Abbey National as one of the two Trading Risk Controllers reporting into Nigel Hopkins. He earned around £100,000 per annum. In 2006, Abbey National dismissed him ostensibly for reasons of redundancy. The redundancy pool of selection was he and the other Trading Risk Controller, his white female colleague.

The selection of a particular employee for dismissal in a redundancy situation must be fair under the general reasonableness test per section 98(4) of the Employment Rights Act 1996. Fair selection for redundancy dismissal calls for the fair application of selection criteria; the selection criteria must be objective and measurable, and must be applied to the correct redundancy pool of employees.

Employment Tribunals will, therefore, begin by looking at the redundancy pool from which the dismissed employee was selected, since the application of otherwise fair selection criteria to the wrong group of employees could affect the fairness of the dismissal. Then, Tribunals will look at the selection criteria that were applied to select the employee for dismissal, and at how they were applied in the scoring of the employee for the purpose of selection for dismissal; the selection criteria and their application must be objective, and not reflect the employer's personal opinions or desires.

The Tribunal found that Mr Hopkins was personally content for Mr Chagger's employment to be terminated, had predetermined that Mr Chagger would be the employee that would be scored lower and selected for redundancy, and had used the redundancy process as a means to remove Mr Chagger from his position; Mr Chagger had been unfairly picked upon.

The Tribunal found that the selection criteria were either un-measurable or all but un-measurable and very subjective. They included 'range of influence', 'empathy', 'self insight' and 'the ability to win hearts and minds'. The Tribunal criticised Mr Hopkins for the way in which he had applied the selection criteria to Mr Chagger. For example, he marked Mr Chagger down for being self-reliant and getting on with things, an attribute the Tribunal noted that other managers might well consider an asset for an employee in Mr Chagger's highly paid and highly responsible position, and score him more highly for. Furthermore, Mr Hopkins made criticisms of Mr Chagger that had never been made prior to the redundancy exercise and that were inconsistent with previous appraisals of Mr Chagger, from which the Tribunal concluded that they were either not legitimate criticisms or were not serious enough to result in a reduced score in the redundancy scoring exercise.

It would seem to be good practice for employers to ensure that more than one person carries out the scoring and assessing of employees for redundancy as a safeguard control to enhance objectivity of the scoring and to minimise the risk of allegations of subjectivity and bias. However, the Tribunal found that Abbey National did not operate this control. Amongst other factors, Mr Hopkins alone had volunteered to Abbey's management to lose one of the two Trading Risk Controllers that he managed (of which Mr Chagger was one), Mr Hopkins had approached only Mr Chagger with an offer to take up voluntary redundancy, which Mr Chagger declined (the other employee in the redundancy pool was not made any such offer), Mr Hopkins had then carried out the compulsory redundancy scoring exercise entirely on his own, and Mr Chagger was the only one whose scores he had marked down. The Tribunal noted that it was clear from placing the two redundancy assessments side by side (Mr Chagger's and that of the other employee in the redundancy pool) that Mr Hopkins had completed the two assessments similarly, with sections being 'cut and pasted' from one to the other, yet where he had marked Mr Chagger's score down he had marked the other employee's score up.

Thus, inappropriate and wholly subjective selection criteria contributed to the Employment Tribunal's finding that Mr Hopkins had used the redundancy process to remove Mr Chagger from his position, and that he and Abbey National had discriminated against Mr Chagger on the grounds of race in respect of Mr Chagger's dismissal.

About the Author:
Abbey National plc & Hopkins v Chagger [2008] and Reverse Burden Of Proof In Race Discrimination UK



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