Mental Health Care (UK) Ltd v Biluan & Anor

In redundancy selection, an employment tribunal must assess whether the employer’s method fell within the range of reasonable responses, without substituting its own preferred criteria. A method may nevertheless be unfair where it relies exclusively on recruitment-style exercises, ignores relevant knowledge of employees’ actual performance, is difficult to apply consistently, and produces results that are demonstrably surprising. Individual imperfections need not invalidate a process by themselves but may contribute to an overall finding of unfairness. Consultation requirements depend on the circumstances. Where no collective consultation duty arises, the principal focus will ordinarily be the individual employee’s position, including alternative employment.

Employees of a residential mental-health facility were selected for redundancy after a ward closure. The employer assessed a workforce-wide pool using recruitment-style written, interview and scenario exercises, together with disciplinary and sickness records. The Employment Tribunal found the dismissals unfair, principally because the process made no use of past performance or the views of managers who knew the employees. It also criticised the application of the criteria and the consultation process.

The employer appealed, alleging substitution of the Tribunal’s preferred criteria, inadequate grounds for criticising the scoring process, and mistaken reliance on principles of collective consultation. The central issue was whether the Tribunal’s finding of unfair dismissal could stand despite some subsidiary criticisms being flawed.

1. Appeal dismissed. The Tribunal was entitled to find that the selection criteria and methods were unfair. The question was not whether the Tribunal would have chosen different criteria, but whether the employer’s approach fell within the range of reasonable responses, applying the principle in Williams v Compair Maxam Ltd [1982] ICR 156.
2. The choice of selection criteria generally permits a wide range of reasonable options. However, it was open to the Tribunal to regard as grossly unfair a process which assessed competence entirely through recruitment exercises, without reference to past appraisals or the views of managers who had worked with the employees. The process produced results acknowledged to be surprising, yet the employer persisted with them because it regarded the process as robust.
3. Minor defects in scoring, assessor training or the use of scenario exercises would not necessarily make a redundancy process unfair. They could nevertheless be taken into account in the overall assessment, particularly where they reflected the unusual use of recruitment methods in a redundancy exercise. The Tribunal was entitled to find that the criteria had been applied in some respects unsatisfactorily.
4. The Tribunal’s consultation criticism was materially flawed. It confused collective consultation principles, including those discussed in R v British Coal Corporation, with the requirements applicable where no recognised trade union or collective representatives exist and the statutory collective consultation duty does not arise. In such circumstances, consultation will ordinarily focus on the individual employee’s circumstances, especially alternative employment.
5. The Tribunal’s criticism of the employer’s reference to getting away with using the whole workforce as the selection pool was unjustified, since the comment merely recognised that the approach might be unwelcome. That error, and the flawed consultation reasoning, did not undermine the primary finding of unfairness. Any remedy, including questions arising under Polkey, was left for the Tribunal.

• Employment Appeal Tribunal: dismissed the employer’s appeal against the Employment Tribunal’s finding that the dismissals were unfair. Remedy, including any Polkey issues, was left for a further hearing if required.