In the case Mitchells of Lancaster (Brewers) Ltd v Tattersall, the Employment Appeal Tribunal (EAT) has dismissed the appeal of an employer against a finding of unfair dismissal in respect of its dismissal of a senior manager as redundant.  However, in doing so, the EAT has approved of the use of subjective selection criteria, commenting that criteria which involve a degree of judgment “are none the worse for that”.

The Respondent had a Senior Management Team (SMT) of five, including the Claimant.  They had to make significant savings and, by June 2010, two members of the Claimant’s team had left and were not replaced.  The Respondent considered whether it could make savings at SMT level, and discussion was had at Board level about the SMT as a whole.  The Board agreed that the Claimant’s role was not one that generated revenue, and would cause the least detrimental impact to the business if it was eliminated.  Further, the skills of all the members of the SMT were considered, and it was concluded that, other than the Claimant, they all had the necessary skills to bring in revenue.  The Respondent therefore commenced consultation with the Claimant and ultimately dismissed him as redundant.

Many aspects of the redundancy procedure were challenged as being unfair, including the criteria by which the Claimant was selected as the candidate for redundancy.  The Tribunal held that the criteria used were unacceptable as they were “wholly subjective and based solely on the views of the directors rather than being objective selection criteria”.

Whilst the EAT upheld the finding of unfair dismissal, it did so for reasons other than the selection criteria used, and criticised the Tribunal’s findings in this respect.  It held that the description of the criteria as being “wholly subjective” was neither helpful nor accurate, and that criteria which “involve a degree of judgment…are none the worse for that”.  It went on to say that “to object to a criterion because it is “based solely on the views of the directors, does not seem to us to be a fair objection”, and “the concept of a criterion only being valid if it can be “scored or assessed” causes us a little concern, as it could be invoked to limit selection procedures to box-ticking exercises”.

Impact for employers

• In determining this case, the EAT noted the fact that the Respondent was a small company in serious financial difficulties.  On that basis, the EAT concluded that it wasn’t inappropriate to make the selection for redundancy as it did.  It is not necessarily clear whether a Tribunal would take a similar view in respect of a larger employer, and so this decision should be treated with a degree of caution.  
• Nevertheless, the EATs comments about subjective vs objective criteria more generally are still helpful for employers seeking to defend an element of subjectivity in its approach to selection for redundancy.