A recent Employment Tribunal (ET) ruling has highlighted the risks of using educational qualifications as selection criteria in redundancy processes.
The case involved a senior construction consultant for a major supermarket. The ET found the supermarket had indirectly discriminated against the consultant based on age, when they scored him lower in a redundancy selection process because he did not hold a degree. The ET ruled that the inclusion of a degree or construction qualification in the redundancy selection criteria amounted to indirect age discrimination. The claimant, who was 63 years old and had worked for the company for nearly 22 years, was awarded £50,926 in total compensation.
While the tribunal found that the redundancy process itself was genuine, it concluded that the consultation process was not reasonable, rendering the dismissal unfair.
Redundancy selection criteria: best practices
This case serves as a reminder for employers to consider their redundancy selection criteria carefully. When designing selection criteria, employers should keep these principles in mind:
- Ensure objectivity: Selection criteria should be as objective and measurable as possible.
- Avoid potentially discriminatory criteria: Employers must not use criteria that directly or indirectly discriminate against protected characteristics.
- Consider a balanced approach: Using a combination of criteria such as skills, performance, attendance (with appropriate adjustments) and disciplinary records can provide a more balanced assessment.
- Consult employees: Consult with employees or their representatives about the proposed selection criteria.
- Document the process: Maintain detailed written evidence to support scores or decisions.
The Polkey principle and compensation reduction
In this case, the tribunal applied a 50% reduction to the compensation award, reflecting the Polkey principle. The Polkey principle, derived from a House of Lords’ judgment in an unfair dismissal case , allows tribunals to adjust compensation to reflect what would have happened if the employer had followed a fair procedure.
This means that, even when a tribunal finds a dismissal to be unfair due to procedural failings, it can reduce its award of compensation if the tribunal believes the employer would have dismissed the employee anyway following a fair procedure. The reduction can be up to 100% in cases where the tribunal believes the procedural errors made no difference to the ultimate outcome.
Key takeaways
This case highlights the importance of carefully designing redundancy selection criteria that are fair, objective and non-discriminatory. Employers should be on their guard for criteria that do not overtly discriminate against certain age groups or other protected characteristics but might do so indirectly because it would be more difficult for people with a particular protected characteristic to score highly.
Even when a genuine redundancy situation exists, procedural fairness remains crucial. While the Polkey principle may limit compensation in some cases, it does not eliminate the finding of unfair dismissal, which can have reputational consequences for employers, or the cost of defending a claim.
