In a redundancy exercise, often employers will need to place employees into a redundancy ‘pool’. This is usually based on those doing similar work, or those who work at similar levels. Employers then select who is to be made redundant from the pool using objective selection criteria. Case law has shown that employers have a wide discretion when it comes to determining the pool. Provided there is evidence that an employer has genuinely applied its mind to the choice of a pool, it will be difficult for an employee to challenge its choice of pool. However, in the case of Family Mosaic Housing Association v Badmos (2013) the choice of pool was challenged successfully.
Mr Badmos, who is from Nigeria, worked as a regional development manager for Family Mosaic Housing Association. There were three regional development managers who dealt with new business, and two regional development managers who dealt with delivery. Mr Badmos dealt with new business. In 2009, the Housing Association decided upon a restructure which would reduce the overall number of regional development managers from five to four. The delivery managers and new business managers were treated as having interchangeable skills, so Mr Badmos’s role was potentially redundant, even though his role was not one of the roles being considered for redundancy.
The Housing Association moved the goal posts at various times in the redundancy process. This culminated in the affected employees being asked to express a preference for either of the two types of role. The Housing Association indicated that if there were more preferences than posts available, a selection process would take place (including interview) to allocate the over-subscribed roles between the remaining employees in the pool. After the preferences were submitted by the employees, The Housing Association did have to follow an interview process but with only the three regional managers who dealt with new business (so the pool went from five to three). Mr Badmos received negative comments on his interview notes. The same person who had interviewed him wrote positive comments in respect of a new business manager being interviewed. The Housing Association then moved the goal posts once again. They had suggested that the selection process would entail an application form, interview, work-based task and psychometric testing, but they changed their minds and selected based on only the interview.
Mr Badmos was selected for redundancy. He appealed, unsuccessfully, against his dismissal. He then brought claims in the Employment Tribunal for unfair dismissal and race discrimination.
The Employment Tribunal found that his dismissal was unfair and that his selection was also tainted with race discrimination. The Employment Judge was particularly critical of the way in which the Housing Association had changed the goal posts with regard to the pool.
The Housing Association appealed to the Employment Appeal Tribunal (EAT). They argued that the Employment Tribunal had substituted its own view of how an employer should behave, in particular with regard to the pool, when making its decision. Mr Badmos argued that whatever the Employment Tribunal’s approach to the pool had been, the findings on unfair dismissal and race discrimination were sufficiently clear that they should stand.
The EAT agreed that the Employment Tribunal had substituted their own view with regard to the choice of pool, but agreed with Mr Badmos that there was still sufficient material to conclude that the unfair dismissal and race discrimination findings should stand.
The case is a lesson to employers that redundancy exercises should be carefully planned, with sufficient thought given to pooling and the way employees will be selected from the pool. The many changes made by the employer throughout the process certainly did not do them any favours in this case, and this could have easily have been avoided by proper planning at the start of the process.
Do you need advice on a redundancy exercise? We can help. Please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).