Subjective criteria not unfair in redundancy procedure

Mitchells of Lancaster (Brewers) Ltd v Tattersall UK/EAT/0605/2011

Facts

Mr Tattersall was employed by the respondent as a property manager from 1 May 1998 until his dismissal on 22 October 2010. The respondent had a Senior Management Team ("the SMT") of five people, including Mr Tattersall, who was employed as property manager. During the first half of 2010, the respondent's trading position deteriorated and the directors were anxious to make savings. At a board meeting in June 2010 it was decided that a proposed restructure was required. Each of the five SMT roles were discussed and it was concluded that cutting the role of property manager would have the least detrimental impact on the business because it was not a role that generated revenue. The business skills of each manager were discussed at this meeting.

Mr Tattersall was informed his role was at risk of redundancy, and after a series of individual consultation meetings, was ultimately dismissed by reason of redundancy. A claim was raised, and the employment tribunal found that Mr Tattersall had been unfairly dismissed, for a number of different reasons. However, the main point of interest arising from the decision was the finding that the criteria by which the claimant had been selected as the candidate for redundancy were unacceptable because they were "wholly subjective and based solely on the views of the directors rather than being objective selection criteria".

The decision of the employment tribunal was appealed to the Employment Appeal Tribunal ("EAT"). In the EAT's consideration of the selection criteria, it held that it was a "matter of common sense" that it must be appropriate for a small company in serious financial difficulty, to apply the criteria considered in the board meeting. These criteria were not, it was opined, "wholly subjective", but involve a degree of judgment, which did not render them inappropriate.

It was further noted that merely because the criteria involved matters of judgment, it did not mean that they could not be assessed in an objective way. Only the most simple criteria, such as length of service or absenteeism record could be properly assessed entirely dispassionately and objectively. Selection procedures should – in the EAT's view – not be reduced to box ticking exercises.

Comment

This decision is useful reassurance for employers having to undertake redundancy procedures, and faced with the dilemma of ensuring that selection criteria used are fair. The EAT have confirmed that a degree of subjectivity is permitted in selection criteria, and not only those criteria that can be "scored or assessed" in a completely objective manner can be used. This would seem a common sense conclusion, but as we have seen over the years, common sense and the interpretation of employment law are not always synonymous.

Employers should still be encouraged to review any criteria used to ensure they are appropriate and, not for example, too vague or imprecise. If subjective assessment is involved, consider whether steps, such as multiple scoring by a number of managers, can be taken. This will reduce the risk that an employee can claim that inappropriate or excessive subjectivity was used.