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‘Blind faith in process’ led to unfairness in redundancy selection

In Mental Health Care (UK) Ltd v Biluan v Makati the EAT considered a tribunal’s decision that a redundancy selection exercise had led to two employees being unfairly dismissed.

In late 2010 Mental Health Care (UK) Ltd (‘MHC’) decided to close of one of its patient wards. It treated as the pool for redundancy all nursing and support staff at the hospital in question. Staff were selected on the basis of: (1) a competency assessment; (2) disciplinary records; and (3) sickness absence records. In the majority of cases, the competency assessment was decisive.

MHC adopted a method of assessing competency that it normally used during recruitment. This included a written assessment, an interview and a “verbal group assessment”. None of the team conducting the assessments had any experience of working with the individuals who were being assessed.

The tribunal heard that this method produced ‘surprising results’ but that MHC had felt bound by the outcome as the process was seen as “fair and transparent”. The tribunal disagreed: “by using this exercise and failing to consider such matters as length of service, appraisal records, the opinion of managers who had known the employees concerned, so that views could be sought of the work records of the individuals concerned, we consider that the system used… was grossly unfair.”

MHC appealed, arguing that the tribunal’s decision was perverse because it had substituted its own opinion of what it would have done in the situation, rather than considering what had been reasonable for MHC to do in the circumstances. The EAT dismissed the appeal. They were satisfied that the tribunal’s description of the competency assessment as “grossly unfair” showed that they considered it to have been outside the range of reasonable options.

The EAT acknowledged that MHC had taken a lot of trouble over the redundancy selection exercise, but criticised the choice of: “an elaborate and HR-driven method“. The EAT said it was not surprised that the tribunal had found that “a blind faith in process” led to MHC “losing touch with common sense and fairness“.

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