How employers should tackle choosing who gets made redundant

Employers should beware of using some measures as part of redundancy selection criteria, as Jo Moseley reports in light of a recent employment tribunal ruling

Mohamad Faizal Bin Ramli/iStockphoto/Getty Images

In Long v British Gas, the tribunal had to determine whether the selection criteria the employer used to determine who to make redundant in a pool of two, discriminated against a women working part-time hours to accommodate her childcare obligations. 

Background 

Mrs Long worked for British Gas as a solicitor. She had a son with “significant additional needs” and then gave birth to triplets. After her maternity leave ended in 2017 she returned to work three days a week. She worked alongside a colleague and they shared the workload between them. 

Her line managers took the view that she “dropped everything” when she left on Wednesdays and put pressure on her to work during her non-working days (despite the fact that she did complete additional work when necessary). As a result, they started to view her in a negative light.

Long's colleague left and she had to pick up her workload until they recruited a new solicitor (which took around six months). 

In 2018, Long was scored as working 'below expectations' during her annual performance review. In particular, she was accused of 'lacking focus'. This came as a shock to her and she argued that her managers hadn't previously brought their concerns to her attention or made any allowance for the fact that her workload had doubled. British Gas was unmoved and refused to upgrade her appraisal score. She was subsequently put on a PIP.

In June 2019 she was put at risk of redundancy alongside the newly appointed male solicitor. British Gas relied on performance reviews over the previous two years to score them. Its policy stated that if someone was on maternity leave for almost all of the leave year in question, it would use the previous year's scores to complete the selection matrix. However, anyone who was absent for another reason (such as illness) had their scores capped. This meant they couldn't get the highest rating.

Despite these clear guidelines, Long's manager used her 2017 and 2018 scores rather than her 2016 and 2018 scores. She then wrongly applied a cap to her 2017 scores even though she had been given the highest rating. In addition, one of the criteria included 'focus'. Long scored one out a possible seven points. 

She argued that including 'focus' meant the selection criteria was stacked against her as a working mother. British Gas were unmoved and she was made redundant. Her appeal failed. 

Long brought a number of claims. She argued that her dismissal was both unfair and discriminatory and that she had been treated less favourably due to her part-time status.

Employment tribunal decision 

The tribunal held that Long had been unfairly dismissed. It also described her score for 'focus' as irrational and contrary to evidence that her focus was good in respect of most of the work she did.

The tribunal also found she had been directly discriminated against because of her sex and treated less favourably because she worked part-time. It also upheld her equal pay claim.

Top tips

Although this decision isn't binding, there are some useful learning points for employers.

1. Selection criteria

The Acas Code of Practice on disciplinary and grievance procedures does not apply to redundancy dismissals. However, its guidance recommends that “criteria should be as ‘objective’ and ‘measurable’ as possible. This means it should be fair, based on facts that can be measured and not affected by personal opinions”. Objective just means you must have a reasonable evidential basis for the application of a criterion. It doesn't mean you can't use qualitative criteria. But, if you do, there's more room for argument about your scores. 

Acas also recommends that employers should try and agree the selection criteria with staff beforehand (something British Gas was criticised for failing to do). There's no legal rule that requires you to individually consult on the selection criteria you intend to use. But, it may be reasonable to do so as part of a fair redundancy process. Consultation doesn't mean reaching agreement. And you are entitled to stick to your criteria provided you've considered any objections raised to it. 

2. Dealing with absences

If your scoring is likely to be affected by an employee's period of absence during the assessment period, you must take steps to minimise, or remove, any disadvantage to that employee, without unfairly disadvantaging other candidates. You'll need to assess each criteria separately, rather than adjusting the overall score.  

3. Using market forces to justify differences in pay between men and women

In professional services, it's common for incoming staff to negotiate the best possible salary – particularly where their skills are in demand and they may have more than one offer. That doesn't necessarily mean that someone of the opposite sex, doing the same or a similar job, will be able to succeed with an equal pay claim. But, if you are going to rely on market forces to justify the difference in pay, you'll need to retain evidence to establish why you paid a higher salary. It's helpful to have data to benchmark salaries. And, if you've had to pay more, keep a record of your negotiations. 

Jo Moseley is a senior associate solicitor at Irwin Mitchell