The Employment Appeal Tribunal (“EAT”) held that subjective redundancy criteria may be appropriate in certain cases, provided that they can be assessed in a dispassionate or objective way.
The claimant, a member of the company’s senior management team, was made redundant. The reason for his selection was because this would cause the least amount of damage to the company’s business. The claimant successfully brought a claim against his former employer in the Employment Tribunal for unfair dismissal. The Tribunal found that the criterion applied was not capable of being scored or assessed objectively.
To fairly dismiss an employee on the ground of redundancy the employer must show that it acted reasonably in dismissing the employee for that reason.
To do so it must show that it has:
- warned and consulted employees of the proposed redundancy;
- adopted a fair basis on which to select for redundancy; and
- considered suitable alternative employment.
The company appealed on a number of grounds, including the Employment Tribunal’s decision that the criterion the respondent used to determine who was to be made redundant was unacceptable because it was wholly subjective and based solely on the views of the directors rather than being objective, as previous case law had emphasised. Although, however, the EAT found there had been unfairness on the issue of the criterion chosen, it disagreed. It found that, although subjective criteria are necessarily matters of judgment, this does not mean that they cannot be assessed dispassionately or objectively and making scoring or assessment measurements a requirement was not justified and could lead to a box ticking approach.
This decision confirms that subjective criteria for selecting for redundancy are not necessarily unfair. If they are to be used, however, care will have to be taken to ensure that the logic underlying it can be clearly and objectively explained.