Unfair selection for redundancy and appeal hearings

Gwynedd County Council v Barratt and another

Two PE teachers were made redundant after a school reorganisation resulted in the amalgamation of various schools in the county.

The teachers had to apply for jobs and go through an interview process, competing with internal and external candidates to avoid redundancy rather than being offered alternative employment by the employer. The teachers claimed unfair dismissal alleging a lack of consultation and an inability to appeal the decision.

The employer argued the dismissal was fair and, in effect that a decision to dismiss was, inevitable and that a 100 per cent reduction in compensation should have been made where a new school (on the same site and managed by the same employer) had refused to employ the teachers over a decision which the school governors were powerless to alter.

The teachers won their case at tribunal and the matter then progressed to the Employment Appeals Tribunal and Court of Appeal in Great Britain to address the employer’s appeal. The employer argued that the judge at the employment tribunal was wrong to rule that there must be “truly exceptional circumstances” to refuse an employee the right of appeal against a decision to dismiss. The employer’s appeal was, ultimately, unsuccessful.

Despite a statutory instrument addressing staffing in schools, the Court of Appeal in Great Britain held that the employer remained subject to its obligations under the Employment Rights Act 1996 (the Northern Ireland equivalent is the Employment Rights (NI) Order 1996). This includes, where teachers are made redundant, the obligation to ensure that a fair process is followed in this regard.

Case law on unfair dismissal by way of selection for redundancy recommends that a fair process, broadly speaking, requires an employer to:

• Give employees as much warning of the potential for dismissal as is reasonably possible
• Consult unions and employees affected about the redundancy selection process
• Apply selection criteria fairly and consider representations on selection
• Try to avoid dismissal by offering alternative employment.

The Court of Appeal confirmed that, in Great Britain, the absence of an appeal in itself does not of itself make a dismissal automatically unfair, although such an absence has to be considered in determining overall fairness. The law in Northern Ireland is different and, as per the three step Statutory Dismissal and Disciplinary Procedure still applicable here, a failure to convene an appeal hearing would result in a finding of automatic unfair dismissal. As it was found that the tribunal in this case had addressed fairness overall, rather than applying a general rule applicable to appeals only, the decision that the dismissal was unfair was upheld by the Court of Appeal.

A well-established House of Lords’ decision known as Polkey confirms that if it could be concluded, reasonably, at the time of the dismissal that steps in a dismissal process would be utterly useless in avoiding a dismissal, a failure to take such steps may not, necessarily, result in a finding of unfair dismissal. In the Barratt case, it was held that even if the employment judge got this point wrong at first instance, this did not invalidate his conclusions on overall fairness and thus the dismissal was still unfair.

If a dismissal would have been inevitable, it is not unusual for a tribunal to reduce a compensatory award sometimes to zero – this is known as a Polkey Reduction. This reduction is not obligatory and, as the Court of Appeal said in Barratt, it is sometimes “impossible to formulate, or at any rate to answer, the hypothetical question of what percentage chance either of the claimants would have had of being dismissed even if a correct process had been followed.”