Redundancy and Suitable Alternative Employment – 19/03/2012

Meet the team:

Share this post: linkedin Twitter facebookshare Email
Posted in:HR and Employment|March 19, 2012 | Join the mailing list

A recent decision from the Employment Appeal Tribunal (EAT), in the case of Samsung Electronics v Monte D-Cruz, has confirmed that when an employee at risk of redundancy is being considered for alternative employment, an employer has considerable flexibility
when assessing their suitability for the role and may use subjective criteria.

In this case, Samsung reorganised its print division. As part of the re-organisation, three Heads of Department roles were to be abolished and merged into a new, single, position of Head of Sales. The Claimant unsuccessfully applied for this post. He was
assessed on a presentation and scored against competencies normally used by Samsung in its annual appraisal process. He then unsuccessfully applied for a more junior role arising out of the restructure. An outside candidate was eventually appointed.

The Claimant brought a claim for unfair dismissal, alleging that the failure to appoint him to a role for which he was so obviously qualified was "engineered" so that an external candidate known to management could be appointed.

The Employment Tribunal found that the Claimant had been genuinely dismissed for redundancy but that the dismissal itself was unfair on the basis that consultation had been inadequate and Samsung’s approach to alternative employment was flawed because the
criteria for selection for the new roles were too "subjective".

The EAT has reversed the Tribunal’s decision. The EAT argued that as to the quality of the consultation process which had been undertaken, the Tribunal had wrongly substituted its own view for that of the employer. As to the arrangements regarding suitable
alternative employment, the EAT considered that the Tribunal had placed undue weight on the use of objective criteria when considering candidates for alternative employment. A Tribunal should certainly consider how far an interview process was objective. However,
the EAT said that "subjectivity" in redundancy cases was often seen as a "dirty word" but it was a fact that not all aspects of an employee’s performance lend themselves to objective measurement. There is no obligation on an employer to use objective criteria
in the context of an interview for alternative employment. The EAT was mindful of the earlier case of Morgan v Welsh Rugby Union [2011] which held that "an employer’s assessment of which candidate will best perform in a new role is likely to involve a substantial
element of judgment".

Alison Loveday of Berg commented: "For a dismissal for redundancy to be fair, the redundancy process (both scoring and consultation) must be reasonable and the employer must have considered suitable alternative employment. The criteria used for scoring employees
for redundancy should, so far as possible, be objective.

However, this case has clarified that when considering an employee for suitable alternative employment, an employer does not have to confine itself to objective criteria but can appoint who it considers is best for the job, even if this is based on a subjective

Employers should be pleased that the approach in the case of Morgan v Welsh Rugby Union [2011] remains good practice and that the fairness of a redundancy dismissal will not turn on objective assessment alone, with the Tribunal and the EAT accepting that,
in many cases, a subjective view of the individual and the needs of the business will be taken."

Join our mailing list

More from berg


"I have been hugely impressed by the common sense approach taken by the entire team as well as by their hard work, good humour and superb advice."

Keith Black, Regatta

“I am genuinely impressed by berg [...] largely due to Alison who is probably the best lawyer I have worked with. Edward helped us deal with the complications that arose in our lives following the destruction of our business. He was helpful, and provided wise advice in a compassionate way..."

Sebastian Parsons, Litigation & Restructuring client