Employers must be able to demonstrate that they have followed a fair selection procedure in order to show that a redundancy dismissal is fair. In Mitchells of Lancaster (Brewers) Ltd v Tattersall, the EAT considered whether it was fair to base redundancy selection on the views of the Board of Directors.
Having decided that it needed to cut its senior management costs, the Board of Directors of Mitchells discussed each of its five senior managers. It concluded that eliminating Mr Tattersall’s role of property manager would have the least detrimental impact on the business because it was the only position that did not generate revenue. The employment tribunal held that he had been unfairly dismissed. Amongst other reasons, it found that the criteria used were unacceptable as they were wholly subjective and based solely on the views of the directors.
Although the EAT agreed with most of the employment tribunal’s findings on procedural unfairness, it did not agree that the selection criteria were inappropriate. The EAT held that some judgement was inevitably involved in deciding the criteria, and the Board’s exercising its subjective judgement was not inherently, unfair. Limiting selection criteria to purely objective factors which could be scored would reduce the procedure to a box-ticking exercise. Although it seems that employers can apply subjective criteria in certain circumstances, it should be noted that the EAT’s comments here were made in the context of a relatively small employer which was in serious financial difficulties, and this approach should not be taken as suported by the EAT generally.