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Unfair Dismissal – Redundancy Selection Criteria

PLEASE NOTE: Information in this article is correct at the time of publication, please contact DFA Law for current advice on older articles.

In a case concerning redundancy dismissal (Mitchells of Lancaster (Brewers) Ltd. v Tattersall), the Employment Appeal Tribunal (EAT) dismissed the employer’s appeal against a finding of unfair dismissal, but disagreed with the finding of the Employment Tribunal (ET) that the redundancy selection criteria used were ‘indefensibly subjective’.

Peter Tattersall was employed by Mitchells of Lancaster (Brewers) Ltd. as a property manager from 1 May 1998 until his dismissal on 22 October 2010. The company had a senior management team of five people, including Mr Tattersall. During 2010, Mitchells’ financial situation deteriorated and the board of directors was anxious to make savings. One of their number was detailed to look at what redundancies could be made at senior management level, and a decision was taken that cutting Mr Tattersall’s job would have the least detrimental effect on the business because it was not a role that generated revenue, whereas cutting other senior management posts could have an adverse effect on the company’s attempts to improve its trading position. Mr Tattersall appealed against the decision to dismiss him but his appeal was rejected.

Mr Tattersall brought a claim for unfair dismissal. The ET upheld his claim. In its view, the criteria by which he had been selected for redundancy were ‘wholly subjective’, being based on the views of the directors rather than objective selection criteria. Furthermore, the process by which he had been selected was unfair as no real consideration had been given to making any of the other four members of the senior management team redundant. Mitchells appealed against the ET’s decision.

The EAT upheld the finding of unfair dismissal on the ground that the redundancy procedure followed by the employer had been unfair. There was no possibility that Mr Tattersall’s job would be saved as the directors had already decided that he was the only person at a senior level who was potentially to be made redundant. No consideration had been given to whether any other post should be selected.

On the issue of the selection criteria used, however, the EAT criticised the ET’s finding that these were wholly subjective as neither helpful nor accurate. The criteria used should be appropriate in the circumstances. This was a small company in financial difficulties. The criteria used in such a situation are bound to involve a degree of judgment but, said the EAT, ‘they are none the worse for that’. To object to a criterion because it was ‘based solely on the views of the directors’ was not a fair objection. Just because criteria used are matters of judgment does not mean they cannot be assessed in an objective way. Opinions might differ, but that is true of virtually any criterion other than the most simple, such as length of service or absenteeism. In the EAT’s view, the concept of a criterion only being valid if it can be ‘scored or assessed’ could result in selection procedures that are nothing more than ‘box-ticking exercises’.

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