It is important for employers to be consistent in a redundancy situation when deciding whether they can offer alternative employment instead of dismissing the employee. In Cumbria Partnership NHS Foundation Trust v Steel, the Employment Appeal Tribunal (EAT) held that as the employer had not used a competency bar when they restructured teams in the past, it was outside the band of reasonable responses to rely on one on this occasion.

Mr Steel’s union, UNISON, instructed Thompsons to act on his behalf in the Tribunal hearing on liability and at the remedy hearing.

Basic facts

Mr Steel had been employed on a series of fixed term contracts from March 2003. By 2009 he was working as a member involvement co-ordinator within the Trust’s patient and referrer experience team.

Following a reorganisation of the team. Mr Steel’s job disappeared and as he could not be slotted in anywhere, he had to compete for two of the new jobs along with two other candidates. The process was governed by the Trust’s management of organisational change policy.

The Trust decided to hold one interview for both roles. Mr Steel did not meet the requirement to achieve 50 per cent of the marks available for either post, known as a competency bar.

His line manager (who was on the interview panel) said that, given his performance, it did not seem likely that he would be able to improve within a reasonable period of time with a development plan.

Mr Steel lodged a grievance, but was unsuccessful. He appealed that decision and the decision to dismiss him, but again was unsuccessful. He then lodged a Tribunal claim for unfair dismissal.

Tribunal decision

The Tribunal said that as there was no provision in the organisational change policy for making use of a competency bar, it was outside the band of reasonable responses for the Trust to have relied on it as part of the interview process. Nor could it find any evidence that the Trust had previously relied on a competency bar in a competitive slotting in process.

It concluded therefore that “No reasonable employer acting reasonably would impose such a bar in respect of existing employees in a procedure that was stated to be a method of avoiding compulsory redundancies. It would be appropriate for a competency bar to be imposed in respect of a recruitment policy. It is not appropriate in a slotting in process ... This was a competitive slotting in process under the respondent’s own procedure and, in these circumstances, the dismissal was unfair”.

EAT decision

The EAT said that although it was not unlawful for employers to use a competency bar when restructuring, the Trust had used it as part of a competitive slotting in process which was not mentioned anywhere in its organisational change policy.

As the policy was non-contractual, it was not binding, and the obligation on the Trust was just to “have regard to it. However, in doing so regard must be had to the purposes and objectives of the policy”.

In this case, it agreed with Mr Steel that underpinning the purpose and objectives of the policy was “a commitment to be open and transparent in the decision making process”, to “operate both the word and the spirit of the agreement” and to adopt a consistent approach.

Given the terms of the policy and past practice, the EAT held that the Tribunal was entitled, on the evidence, to conclude that the imposition of a competency bar in the context of a slotting in process was outside the band of reasonable responses. Accordingly, the appeal failed.