Labour & European Law Review Weekly Issue 278 19 July 2012
When dismissing someone by reason of redundancy, case law indicates that employers should rely on selection criteria that are objective and non-discriminatory. In Mitchells of Lancaster (Brewers) Ltd v Tattersall, however, the Employment Appeal Tribunal (EAT) said that Tribunals should be careful not to limit the criteria to those that can only be “scored or assessed” in order to avoid turning selection procedures into box-ticking exercises.
Mr Tattersall was the property manager for Mitchells of Lancaster, a brewer as well as the owner of hotels and pubs. He was also a member of the senior management team (SMT).
During the first half of 2010 the company started to experience financial difficulties and in June the board decided to make savings by reducing the size of the SMT. At another board meeting in July, it agreed to restructure the company by cutting the role of property manager, on the basis that this would have the least detrimental impact on the business because it was not a revenue-generating role.
After undertaking four consultation meetings, the company gave Mr Tattersall notice of dismissal. He appealed unsuccessfully against the decision and his employment terminated on 22 October 2010.
He claimed unfair dismissal.
The Tribunal agreed that he had been unfairly dismissed on the grounds that:
- the pool should have consisted of the five members of the SMT, not just Mr Tattersall
- the criteria used were unacceptable because they were “wholly subjective”
- the selection process did not give him the opportunity to argue against his selection
- the internal appeal process was unfair because of the “personal history” between Mr Tattersall and the dismissing officer.
However, it reduced his compensation by 20 per cent on the basis that even if the procedure had been fair, he would still have been dismissed (known as a Polkey reduction).
The EAT agreed with the Tribunal, but on one ground only - that the pool for selection should have consisted of all members of the SMT. The failure to consider the other four managers, it said, had rendered the procedure unfair.
However, it criticised the Tribunal for finding that the selection criteria were too subjective, saying that “just because criteria of this sort are matters of judgment, it does not mean that they cannot be assessed in a dispassionate or objective way”.
It noted that all criteria involve a degree of judgment “in the sense that opinions can differ, possibly sometimes quite markedly, as to precisely how the criteria are to be applied, and the extent of [sic] which they are satisfied, in any particular case”.
It added that “However, that is true of virtually any criterion, other than the most simple criterion, such as length of service or absenteeism record. 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”.
it also upheld the company’s appeal against the value of the Polkey reduction and remitted the issue to the Tribunal, directing it to increase the 20 per cent reduction.