The EAT has held that an employer has a wide measure of flexibility in determining the pools for selection in a redundancy process (Lomond Motors Ltd v Clark).
The issues faced by the employer in this case will be familiar to those involved in carrying out redundancy exercises. Lomond Motors had four car dealerships, two in the west of Scotland and two in the east. Mr Clark worked as a branch accountant, originally in the west and, by the time of his dismissal, in the east. There was one accountant responsible for both branches in the west region, but two accountants, including Mr Clark, in the east region. Lomond Motors decided that it would be better for its business to have only one branch accountant in the east, who would be responsible for both sites in that region. This meant that one of the accountant's positions would be redundant.
It used a selection pool consisting only of the two branch accountants in the east. Mr Clark was selected for redundancy and lost an internal appeal. He claimed unfair dismissal on the basis that the selection pool should have included the accountant in the west. The tribunal upheld his claim.
The EAT disagreed, however, emphasising that the question to be answered was whether the method and selection were such as could have been determined by a reasonable employer. Different people can quite legitimately have different views about what is fair in any particular situation and the employer therefore has a wide measure of flexibility to determine the appropriate pool. Lomond Motors' chosen pool was within the range of reasonable responses.
Impact on employers
- This is a very favourable decision for employers and confirms that they have flexibility in identifying an appropriate selection pool for redundancy provided it does so in a reasonable way.
- Provided that an employer can put forward a reasonable case for using a particular selection pool, a tribunal should not interfere with its decision.
- A note of caution, however: such an employer-friendly decision may not withstand future challenges.