A recent case at the Employment Appeal Tribunal http://bit.ly/WSGVe1 demonstrates the serious risk of using redundancy as a cover for a capability dismissal. I suggest that this happens often. Lack of capability can be hard to prove and, if proven, leaves the employee with no more than notice pay and with a stain on their career. Redundancy provides some financial compensation and is less of a barrier to future employment than “incapability”.
However this case confirms that if a redundancy is not a true redundancy then the employee can claim that the dismissal is unfair. If the employee succeeds then the compensation may be substantially greater than would be the case with redundancy – and the lack of capability is, of course, not proven. Whether a successful unfair dismissal claim against a former employer is more damaging to a career than being deemed “incapable” may depend on where in their career the employee might be.
On balance it is much safer if the employer follows a full capability procedure and is able to show that the employee lacks capability on the (preferably strong) balance of probability. Then capability, not redundancy will be the reason for dismissal – whatever the career or financial implications for the employee. Masking capability with redundancy is unsafe if the employee does not perceive that redundancy is in their best interests.