Ltd v Hurdus UKEAT/0377/10/RN

Appeal against a ruling that the claimant had been unfairly dismissed by reason of redundancy. Appeal allowed and Tribunal’s finding was reversed.

The claimant was one of two recruiters, he having been employed in that position for 3 years on a grade 6. His colleague had been working in that position for just 6 months initially on grade 5 but promoted to grade 6 just before the redundancy exercise. A redundancy selection exercise followed with just the 2 employees in the pool. The selection process operated on the basis of performance review scores over the last 2 years, the claimant scored less than his colleague and he was selected for redundancy. He applied for another post within the organisation but was unsuccessful. The Tribunal upheld his claim of unfair dismissal, saying that the assessment of the colleague against the claimant was unfair because it was not a like-for-like comparison – the colleague had only been working in that role and at that grade for 6 months. Also, the claimant had no realistic chance of securing the alternative post for which he applied.

At the EAT, the respondent complained that the Tribunal had engaged in an over-minute investigation of the employer’s selection process. They also claimed that the Tribunal had erred by substituting its view for that of the employer. The EAT agreed. The Tribunal’s expressed view of how the selection process might be improved was not permissible in law. On the issue of alternative employment, the EAT ruled that the respondent had taken reasonable steps to find the claimant another post – it is only if there was a vacant post for which the claimant was suitable but was not considered for that the employer acts unreasonably.


Appeal No. UKEAT/0377/10/RN



At the Tribunal

On 10 February 2011








Transcript of Proceedings



For the Appellant
MR B LYNCH (of Counsel)
Instructed by:
Messrs Cozens-Hardy & Jewson Solicitors
Castle Chambers
Opie Street

For the Respondent MR A HURDUS (The Respondent in person)


UNFAIR DISMISSAL – Reasonableness of dismissal

Employment Tribunal found dismissal for redundancy reason unfair under s98(4) Employment Rights Act 1996 on two grounds; (i) selection (ii) alternative employment. As to (i) ET substituted own view as to a fair selection procedure and as to (ii) failed to consider whether employer's attempts to find alternative employment for redundant employee fell within band of reasonableness.

Appeal allowed; ET decision reversed; finding of fair dismissal substituted.

  1. The parties in this matter before the Reading Employment Tribunal were Mr Hurdus, Claimant, and, Respondent. This is an appeal by the Respondent against the judgment of an Employment Tribunal chaired by Employment Judge Gumbiti-Zimuto, promulgated with Reasons on 21 April 2010, upholding the Claimant's complaint of unfair dismissal by reason of redundancy. The Respondent was ordered to pay compensation totalling £9,079.57.
  1. The Tribunal found that the dismissal was unfair under section 98(4) of the Employment Rights Act 1996 on two grounds. First, the selection procedure leading to the Claimant losing his job was unfair; secondly the Tribunal found that in respect of a prospective alternative role for the Claimant as Labour Manager the Respondent was simply going through the motions in giving it to someone else. Although the process employed by the Respondent for filling that post was not a sham, the Tribunal found that there was no realistic prospect of the Claimant securing the post.
  1. Finally the Tribunal considered the Polkey question which routinely arises in redundancy dismissal cases. They concluded that had a fair process been followed in respect of either his selection for redundancy or appointment to the alternative position of Labour Manager there was a 50% chance that the Claimant would have remained in employment. Thus a 50% deduction was applied to their calculation of his gross loss for the purposes of the compensatory award, save in respect of the loss of statutory rights head of compensation. The basic award was extinguished by the redundancy payment made by the Respondent to the Claimant following dismissal.
  1. In this appeal the Respondent challenges the Tribunal's reasoning under four separate heads. The first two grounds relate to liability; whether dismissal was fair or unfair; the last two to remedy. It was agreed at the outset of this hearing that we should deal with the liability grounds first. Before doing so we should recount the salient facts as found by the Tribunal.
**The Facts**
  1. The Respondent is a well-known organisation which sells books and other products via the internet. The Claimant commenced his employment as a Senior Recruiter, a grade 6 post, on 13 February 2006. He was involved in the recruitment of managerial and IT staff. He reported to Ms Chastain.
  1. In about June 2008 Ben Murphy-Ryan was moved from the corporate recruiting section to the operations recruiting section where the Claimant was then the only recruiter. Now there were two. Initially Mr Murphy-Ryan was on grade 5 but in February 2009 he was promoted to Senior Recruiter on grade 6 with effect from 1 April 2009. He was then on the same terms, performing the same function, as the Claimant.
  1. The volume of relevant recruitment fell by about 50% and Ms Chastain formed the view that only one recruiter was needed. A redundancy selection exercise followed, the two candidates for the remaining post being the Claimant and Mr Murphy-Ryan.
  1. The selection process operated in this way. The Respondent's performance review process would be used to generate scores for a redundancy selection matrix. The final scoring was done by Ms Chastain with assistance from a member of the HR department. The performance review scores for both candidates in the years 2007-2008 and 2008-2009 were used. The performance review model included a performance grading under the heading, "Leadership principles and values". Applying that method the Claimant was scored 11 by Ms Chastain and Mr Murphy-Ryan 13 points. On that basis Mr Murphy-Ryan fell to keep the remaining Senior Recruiter post in preference to the lower scoring Claimant.
  1. During the consultation process, which the Tribunal does not criticise, the Claimant raised a challenge to the use of the leadership principles as part of the selection scoring process at a meeting held on 26 March 2009. The Respondent did not accept that challenge and at a subsequent meeting held on 2 April he was informed that his employment would be terminated on the grounds of redundancy.
  1. Prior to the effective date of termination on 7 April, the Claimant had expressed an interest in the vacant permanent position of Labour Manager, then occupied by Ms Samantha Danvers on a fixed-term contract. Accordingly an arrangement was made for both the Claimant and Ms Danvers to be interviewed for the permanent Labour Manager post. Following interview Ms Danvers was selected for that permanent position and the Claimant's employment ended on 7 April.
**The Tribunal's Conclusions**
  1. In summary, the Tribunal held:

(1) that the reason for dismissal was redundancy; a potentially fair reason

(2) dismissal for that reason was unfair because

(a) the assessment of Mr Murphy-Ryan against the Claimant was not a like-for-like comparison, because for one and a half of the two year performance review period he was employed in a different role and at a lower level than the Claimant (Reasons paragraph 40-47);

(b) the Claimant had no realistic prospect of securing the alternative post of Labour Manager.

(3) The Tribunal then went on to make findings relevant to the calculation of the compensatory award.

**The Appeal**Liability
  1. Mr Lynch attacks both findings by the Tribunal relating to selection and alternative employment leading to the conclusion that the dismissal was unfair. In order to advance those submissions he was anxious to draw our attention to evidence given by the Respondent's witness, Wendy Mansell, which did not find its way into the Tribunal's findings of fact. In the event we have not found it necessary to go outside the Tribunal's findings in order to deal with the real points of law raised in the appeal.
  1. Two principles of law are relied on by Mr Lynch. First, Tribunals ought not to engage in an over-minute investigation of the employer's selection process in a redundancy dismissal case, see British Aerospace v Green [1995] IRLR 433, paragraph 3, per Waite LJ. Although, as Mr Hurdus points out in his submissions, in that same judgment at paragraph 13 Waite LJ observed that a marking system, as in the present case, will not render a selection automatically fair. Every system has to be examined for its own inherent fairness, judging the criteria employed and the method of marking in conjunction with any factors relevant to its fair application.
  1. The second, broader principle under section 98(4) ERA, is that the Tribunal must not substitute its view for that of the employer, a principle which this Tribunal recognised at paragraph 46 of their Reasons. For a clear, modern example of the principle in practice, see Mummery LJ in London Ambulance Service v Small [2009] IRLR 563, particularly paragraphs 40-43, a case involving dismissal on grounds of the employee's conduct, but the principles apply equally here.
  1. Applying those principles to the Tribunal's reasoning at paragraphs 40-47 we accept Mr Lynch's submission that the Tribunal, despite their correct self-direction, then fell into the trap of substituting their view of what a proper selection procedure ought to entail in this case for the real question, was the system adopted and applied by this employer one which fell within the range of reasonable responses? By way of example, they considered at paragraph 43 that there is a genuine distinction to be made between a level 5 employee who is performing so as to merit promotion to a level 6, and a level 6 employee who is performing satisfactorily within a level 6 role.

"While the Level 5 employee may well merit a promotion because of his performance, in our view. that does not necessarily translate to a situation where when measured against the Level 6 employee, who is performing satisfactorily, that the Level 5 employee should be preferred to the Level 6 employee simply on a consideration of the scores obtained."

  1. That may or may not be so, but that distinction does not render the model adopted by the Respondent unreasonable. It is the Tribunal's own expressed view of how it might be improved; that is not a permissible approach in law.
Alternative employment
  1. Here the Tribunal has, in our judgment, lost sight of the review function which it was required to carry out. The question was whether the Respondent took reasonable steps to find alternative employment for the Claimant so that he could retain his employment. Even if the Claimant had no realistic prospect of securing the Labour Manager's position (see paragraph 48) because the job had been effectively promised to Ms Danvers if her six month fixed-term employment in the post went well, that does not render his dismissal by reason of redundancy unfair. It is only if there was a vacant post for which the Claimant was suitable but he was not considered for it that the employer acts unreasonably in this context.
  1. In our judgment the Tribunal fell into error in its approach to both questions decided in favour of the Claimant for the reasons which we have given. Standing back, redundancy, through no fault of the Claimant employee, not unnaturally attracts sympathy. However, it is for the employer to adopt a selection procedure, not the Employment Tribunal. Only if it is unfair in the sense earlier explained will dismissal for that reason be unfair.
  1. In these circumstances we shall allow the Respondent's appeal on liability. As to disposal, we bear in mind Jacob's LJ exhortation in [Buckland v Bournemouth University ]()[2010] IRLR 445 to decide the case here rather than remit to the Employment Tribunal as Mr Hurdus invites us to do. It seems to us that when the correct questions are asked it is plainly and unarguably the case that the Respondent here adopted a fair selection matrix, applied it fairly to the appropriate pool of the Claimant and Mr Murphy-Ryan and took all reasonable steps to find the Claimant alternative employment. In these circumstances we shall reverse the Tribunal's finding and substitute a finding of fair dismissal. It necessarily follows that the remaining grounds of appeal relating to remedy are rendered moot and we make no finding on those grounds, which indeed have not been argued before us.

Published: 11/03/2011 10:10

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