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Redundancy Selection and Competency Assessments

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[Thanks to Liane Atkin of Collingwood Legal for preparing this case summary]

Is it fair to carry out a redundancy selection exercise where employee capability is assessed entirely on the basis of competency tests?

Not necessarily, says the EAT in Mental Health Care (UK) Ltd v Biluan & Anor, particularly if no account has been taken of past performance.

The case involved a redundancy exercise where staff were selected using selection criteria comprising disciplinary and absence records and a competency assessment.  In the vast majority of cases it was the competency score which was decisive.  The manager said that he was surprised by the competency results and that several employees who had been selected for redundancy were good employees. 

The original tribunal held that dismissals were unfair because capability had been assessed mainly on the competency assessments and had taken no account of prior performance.  The employer appealed arguing that the tribunal had substituted its own view.  The EAT acknowledged that the employer took care over the process but chose an 'elaborate and HR driven method' depriving it of the benefit of input from managers and others who knew the staff in question.  Importantly for employers they commented that whilst it is desirable to seek to avoid subjectivity and bias, this goal can come at "too high a price" adding that it is misplaced to fear that a tribunal will find a procedure unfair only because there is an "element of 'subjectivity" involved.  The appeal was dismissed.