Cumbria Partnership NHS Foundation Trust v Steel (Rev 1)

Under section 98(4) of the Employment Rights Act 1996, fairness in selecting a redundant employee for an alternative role depends on the particular procedure used, including the employer’s applicable policy and established practice. A competency threshold is not inherently impermissible when appointing to a new role after restructuring. However, an Employment Tribunal may find dismissal unfair where an employer imposes such a threshold in a competitive slotting-in process although its organisational-change policy and past practice do not envisage it, and the threshold converts redeployment into ordinary recruitment.

The claimant, a displaced employee following a restructuring, applied for a new band 5 role through the Trust’s competitive slotting-in process. Although he obtained the highest score for that role, he did not meet an interview competency bar of 50 per cent and was not appointed. He was later dismissed for redundancy.

The Employment Tribunal at Carlisle held that redundancy was the potentially fair reason for dismissal but that the dismissal was unfair. It found that imposing the competency bar in a competitive slotting-in process fell outside the band of reasonable responses. The Trust appealed, contending that the Tribunal had wrongly treated the process differently from recruitment for new roles after a reorganisation.

1. Appeal dismissed. The Employment Tribunal was entitled to hold that the dismissal was unfair under section 98(4) of the Employment Rights Act 1996.
2. The Tribunal had not adopted an impermissible general rule that an employer can never use a competency bar when considering redundant employees for newly created posts. The authorities concerning appointments to new roles after reorganisation remained relevant, because such decisions are ordinarily forward-looking assessments of an employee’s ability to perform the new role.
3. However, fairness required consideration of the actual process adopted. The Trust’s policy created a competitive slotting-in process for displaced staff and was directed to employment security and avoidance of compulsory redundancy. There was no clear evidence that the Trust had previously used a competency bar in that process. The policy did not expressly exclude one, but its terms and the evidence permitted the Tribunal to conclude that a bar was not envisaged.
4. The threshold did more than determine which candidate should receive the post. Failure to attain it meant that no candidate could be appointed and that the claimant would not be considered capable of improvement through a development plan. On the Tribunal’s permissible view, this changed slotting-in into ordinary recruitment. It could therefore find, without substituting its own view, that the Trust’s use of the bar and the resulting dismissal lay outside the band of reasonable responses.

• Employment Appeal Tribunal: Appeal dismissed; the Employment Tribunal’s finding of unfair dismissal was upheld.
• Employment Tribunal, Carlisle: Held that dismissal for the potentially fair reason of redundancy was unfair. The decision was sent to the parties on 1 September 2011.