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Two recent EAT cases on redundancy selection

Two recent cases of the EAT have laid down clear limits on the approach to be taken in assessing redundancy exercises in cases of unfair dismissal.

In Nicholls v Rockwell Automation Ltd [2012] UKEAT/0540/11/SM an employee was assessed for redundancy through a points-based exercise.  The Tribunal went through this exercise and decided that it was unfair for two reasons.  First, because some of the criteria were ‘not capable of objective assessment’, and second because some of ‘the marks given to the claimant do not actually reflect what was recorded in the relevant documentary evidence’.

The EAT rejected this approach.  They noted that the Tribunal made ‘no findings as to why the markers had addtributed the marks they did to the items in question’, and therefore had no basis for assessing whether they were reasonable.  Rather, the Tribunal had fallen into the error of substituting its own view for that of the employer.

Further, the EAT affirmed its view in Mitchells Of Lancaster (Brewers) Ltd v Tattersall [2012] UKEAT/0605/11/SM: it is not fair to object to criteria simply on the basis that they are subjective.  Not every criterion has to be objective; the question is whether ‘overall the redundancy criteria were reasonable’.  That a criterion is subjective does not mean that it ‘cannot be assessed in a dispassionate or objective way’.  The EAT were keen to avoid such an objection being ‘invoked to limit selection procedures to box-ticking exercises.’

In taking this approach, the EAT have focused the assessment of reasonableness on the specific actions taken by the employer in the particular case, rather than on the more general features of a case.  Instead of looking at the criteria used or scores given by themselves, parties and Tribunals should focus on whether the application of those criteria, or the act of scoring, was unreasonable.  Although inherently unreasonable criteria may still be a legitimate area for complaint, the grounds for this are narrower than mere subjectivity, and must be assessed against the redundancy exercise as a whole.  The EAT has thus given employers a degree of latitude in how to conduct redundancy exercises, with a concern to avoid subjecting these to artificial restrictions or second guessing.
Related link:  Profile of Ben Gray
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