Redundancy competency tests unlawful because of "blind faith" of HR

In Mental Health Care (UK) Limited v Biluan and another UKEAT/0248/12, the EAT held that it is not. This case considered the fairness of a redundancy selection process which utilised assessment centre competency tests normally used when recruiting new employees.

Facts

In 2010, the management of a residential hospital decided that there was a need to close one of its wards, resulting in 19 redundancies. The pool for redundancy was all 58 nursing and support staff, who were placed at risk of redundancy and subject to a 30 day consultation period which would include a selection process.

The selection process considered three criteria:

1. A competency assessment (given more weight than the other criteria)
2. Disciplinary record
3. Sickness absence record

The hospital regarded the selection process as robust, fair and transparent, in the absence of historical performance appraisal data. The assessment was carried out by a team of HR staff, none of whom had experience of working with the employees in the redundancy pool. There was no consultation with management who had worked with them, nor was there any regard for past appraisals.

The assessment proved decisive in most cases, due to its weighting in comparison to the other criteria, which led to some ‘very surprising’ results and an admission by the acting manager of the hospital that some good workers were selected for redundancy.

The Claimants (a nurse and support worker) brought successful unfair dismissal claims in the ET. The hospital appealed the decision to the EAT.

Decision

The EAT upheld the ET’s finding of unfair dismissal, on the basis that the hospital had acted unreasonably when using the competency tests as part of the selection process, stating that the hospital’s ‘blind faith in process’ had led to it losing touch with common sense and fairness.

It was commented by the EAT that, while the hospital had clearly considered their selection process, it was mistaken in choosing an elaborate method that was HR-driven. This approach prevented the managers contributing valuable knowledge into the process. Despite ‘surprising’ results being produced, the method was persisted with due to the mistaken belief that the process was so ‘robust’.

The case highlights the need for employers to depart from the conventional approach to selection criteria with caution, and that line managers (who have valuable insight into the employees performance on a day to day basis) should be involved in the selection process wherever possible.

Kerry Armstrong
Carillion Advice Services