A. Janvi Patel of Halebury Law writes:
In an ideal world you would advertise the vacancy throughout the company and potentially externally as well so that anyone who would like to apply for the role can apply. You would then undertake a fair and objective interview and selection process. Morally and legally this is the correct process to follow. From a moral perspective, an open and objective process shows employees that you are a fair and open employer and that you follow best practice.
If the ideal world option is really not possible, you need to assess the legal risk. There are a number of issues you need to consider; by creating the new position are you demoting anyone or taking part of a role away from someone? If this is the case, you should be concerned with constructive unfair dismissal, particularly if that person is the individual who is “less suitable”.
Secondly, if the less suitable individual has been selected for redundancy, he or she may be searching for an alternative position. If this is the case, the individual should be permitted to apply if the role is a suitable alternative. Failure to do so could lead to a claim for unfair dismissal due to redundancy.
The next question is, are there any issues of discrimination? Could the unsuitable candidate argue that there are discriminatory reasons for not selecting him/her for the job? If there is the possibility of a discrimination claim, you need undertake a fully open and fair selection process. The last claim any company would want to face is one for discrimination - the adverse publicity and the potential of the unlimited compensation could be extremely damaging for all involved.
If there is no issue of constructive dismissal, unfair dismissal due to redundancy or discrimination, the answer is that your risk is low and therefore you could simply turn down the unsuitable candidate. However, it is good practice to ensure that all candidates are given due and objective consideration before being selected for a role. Finally, whichever route you decide to take, it is important that you document the process in the event that it does lead to a tribunal claim.