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Selection for redundancy following a transfer

Posted on 20th April 2011
Case law

The use of selection criteria which was applied equally to the transferor's and transferee's employees during a redundancy exercise was fair without moderation.

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First Scottish Searching Services Limited v Mr McDine and Mr Middleton UKEATS/0051/10

Background

Mr McDine (D) and Mr Middleton (M) transferred from SPH, the transferor, into the employment of First Scottish Searching Services Limited (F), the transferee, under the Transfer of Undertakings (Protection of Employment) Regulations 2006. After the transfer F carried out a redundancy process. The selection of employees was based on a mix of objective and subjective criteria which it had used before.

The pre-existing employees of F were scored by their line managers. D and M were scored by former SPH managers. SPH had had a formal appraisal system and daily quality spreadsheets. The managers relied upon the information they could recall from these systems when carrying out the scoring. F had no such systems.

The employees placed at risk of redundancy after the scoring had all been transferred to F. D and M believed that this was deliberate.

The decision

The Tribunal concluded that the dismissals were unfair as F did not adopt any system 'to moderate the two sets of scores' and this fell outside the 'range of reasonable selection systems'. The EAT disagreed with this approach. It upheld the dismissals. The EAT noted that the scoring of each group (those previously employed by SPH and the pre-existing employees of F) was carried out by managers who knew them. It also noted that any 'moderation' and verification of the scores of the other group would be done by managers who did not know the employees.

In practice

This case is an interesting consideration of a problem which transferees (the new employer - F in this instance) often face following a transfer; how do you select employees for redundancy after a TUPE transfer from a pool of selection made up of existing employees and employees who have just transferred in?

This case should not be relied on to say that the transferee will always be safe to carry out scoring by different managers without any form of 'moderation' or check in place. The EAT found the employment tribunal's decision was unreliable as there was no evidence to suggest that, had there been moderation, the scoring for D and M would have been higher and therefore the outcome different. Such evidence may be available in other cases. There was also no evidence that F had deliberately set up the scoring so that SPH employees would be selected. In fact it had adopted criteria it had used in an earlier redundancy pre-dating the transfer. 

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