Factual and Procedural Background
This is an appeal from a unanimous judgment of a London South Tribunal chaired by Employment Judge Amin, who in August 2007 determined that the Claimant had been unfairly dismissed. The Claimant’s claims for direct sex discrimination were dismissed, and a claim for indirect disability discrimination was stayed pending a European Court of Justice decision in Colman v Attridge. That decision has now been received, allowing the matter to return to the Tribunal.
The Tribunal’s decision related to an unfair redundancy concerning the Claimant’s employment as an administrator and ambulance driver for Company A, which operated a private ambulance service. Following a downturn in business, a redundancy situation existed, but the Tribunal criticised the employer for lack of consultation, subjective selection criteria, the manner of applying those criteria, and the failure of an appeal process to address these defects. The Tribunal did not make any Polkey deduction.
On appeal, a preliminary hearing was ordered, and the appeal was permitted to proceed to a full hearing with a note that an issue regarding the curative effect of section 98A(2) of the Employment Rights Act 1996 had not been argued before the Tribunal.
The appeal focused on whether the Tribunal had improperly substituted its view of fairness for that of the employer, incorrectly placed the burden of proving fairness on the employer, and failed to make any Polkey deduction.
The Claimant was initially unrepresented but later obtained pro bono legal assistance shortly before the hearing. A late cross-appeal was refused leave to be filed.
In terms of background facts, the Claimant worked for Company A from January 2005 until dismissal in January 2007 on redundancy grounds. The company had three branches and 147 employees. The Claimant had a profoundly disabled daughter and had her working hours reduced in 2006, eventually working term-time only. The Claimant asserted that her dismissal was due to this reduction rather than a true redundancy.
Company A faced a downturn in repatriation work in 2006, necessitating redundancies at the Claimant’s site, where four employees were to be made redundant from a pool of fourteen.
The selection process involved a senior HR manager marking non work-related criteria from personnel files and the Claimant’s line manager marking other criteria based on personal knowledge. An appeals officer was appointed.
A group announcement was made in November 2006, and volunteers were sought. Two meetings with staff were held, but the Claimant was not informed of the second meeting. Two full-time vacancies were available but not realistically offered to the Claimant. The selection criteria included nine factors, some verifiable from records and others based on subjective assessments.
The Tribunal found the criteria and definitions wholly subjective and incapable of objective measurement. The process involved the HR manager relying on the line manager’s personal judgment without objective evidence or notes, and the Tribunal criticised the lack of transparency and consultation with the trade union and staff.
The Claimant was informed of her scores in January 2007, challenged them, but was ultimately dismissed on redundancy grounds. She appealed on grounds of discrimination and unfair scoring, but the appeal was dismissed without independent verification of the scoring process.
The Tribunal concluded there was inadequate consultation, the selection criteria were not objectively applied, and the scoring was unfair and unreasonable. They found that the appeal process did not remedy these defects.
Legal Issues Presented
- Whether the Tribunal erred in substituting its own view of fairness for that of the employer rather than applying the "band of reasonable responses" test.
- Whether the Tribunal incorrectly placed the burden of proving fairness on the employer rather than treating it as a mutual burden.
- Whether the Tribunal erred in failing to make any Polkey deduction regarding the likelihood of dismissal if fair procedures had been followed.
Arguments of the Parties
Appellant's Arguments
- The employer adequately consulted staff and gave as much warning as possible.
- The selection criteria were as objective as possible, with the line manager fairly applying personal knowledge aided by defined scoring guidelines.
- The scoring process was applied consistently to all candidates with no evidence of bias against the Claimant.
- The HR manager’s evidence on the scoring process was sufficient to establish fairness and objectivity.
- The appeal process was sufficient to ensure fairness without requiring detailed scrutiny of individual scores.
- The Tribunal wrongly imposed a burden of proof on the employer regarding fairness beyond what the law requires.
- The Tribunal failed to assess whether there was a real risk the Claimant would have been dismissed even if fair procedures had been followed, citing relevant case law on Polkey deductions.
Respondent's Arguments
- The selection system was entirely subjective and unverified by any company documentation or notes.
- The key low scores in performance and commitment by the line manager were determinative and unsupported by objective evidence.
- There was no consultation with the union or employees on criteria or methodology, which was pre-determined by the HR manager.
- The absence of union consultation prevented any meaningful challenge or verification of subjective scoring.
- The appeal process did not cure defects since the appeal officer did not investigate how scores were determined.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Williams v Compair Maxam Ltd [1982] IRLR 83 |
Standards for fairness in redundancy dismissal, including consultation, objective criteria, and consideration of alternative employment. |
Used to frame the Tribunal’s assessment of procedural fairness and consultation adequacy. |
| Eaton Ltd v King [1995] IRLR 75 |
Employer’s establishment of a good system of selection, fairly administered, with no need to justify all individual assessments. |
Appellant relied on this case to argue fairness; Court distinguished it due to absence of union consultation and subjective unverified scoring in the instant case. |
| British Aerospace v Green [1995] IRLR 433 |
Endorsement of Eaton Ltd v King on sufficiency of a good, fairly administered selection system. |
Confirmed that employers need not justify every individual assessment if the system is fair; cited to contrast with present facts. |
| John Brown Engineering Ltd v Brown [1997] IRLR 90 |
This authority was provided but specific rule or application was not detailed in the opinion. |
The Court provided this case as part of legal materials but did not elaborate on its application in the judgment. |
| Buchanan v Tilcon Ltd |
The burden on employer to prove reasonableness of redundancy selection and the limits on requiring evidence for every individual assessment. |
Used to critique the Tribunal’s demand for evidence explaining individual scores and to support the principle that a reasonable employer’s decision is sufficient. |
| Atkinson v George Lindsay & Co [1980] IRLR 196 |
Clarification that dismissal for redundancy is difficult to prove unreasonable if employer acts reasonably. |
Supported the principle that tribunals should not require excessive proof beyond reasonableness of employer’s decision. |
| Cox v Wildt Mellor Bromley Ltd [1978] IRLR 157 |
Employer can discharge burden by witness evidence explaining dismissal circumstances without exhaustive proof. |
Affirmed the sufficiency of reasonable senior witnesses’ evidence to justify redundancy decisions. |
| Software 2000 Ltd v Andrews [2007] IRLR 568 |
Principles for assessing compensation and Polkey deductions, including evidential burdens and handling speculative evidence. |
Guided the Court’s analysis of the Tribunal’s failure to properly assess the likelihood of dismissal absent procedural defects. |
Court's Reasoning and Analysis
The Court analysed the fairness of the redundancy dismissal by applying established legal principles, notably from Williams v Compair Maxam Ltd, which sets out criteria for fair redundancy procedures including consultation, objective selection criteria, and consideration of alternative employment.
The Court distinguished the present case from Eaton Ltd v King and British Aerospace v Green, where selection systems were considered fair and adequately administered with union consultation. Here, the Court found that the selection criteria were largely subjective and left to one individual’s unverified personal judgment without supporting documentation or consultation with the union or staff.
The Tribunal’s findings that the scoring process was unfair, subjective, and lacked transparency were upheld. The Court agreed that the appeal process did not remedy these defects, as the appeal officer did not investigate the scoring methodology.
Regarding the burden of proof on fairness, the Court acknowledged that while the Tribunal’s phrasing was regrettable, the overall conclusions on fairness were correct. The Court emphasised that the fairness issue is neutral and to be assessed by the Tribunal on the evidence.
On the Polkey point, the Court referred to Software 2000 Ltd v Andrews for guidance on assessing the likelihood of dismissal absent procedural defects. The Tribunal’s conclusion that there was insufficient evidence to predict dismissal with certainty if fair procedures had been followed was accepted, given alternative vacancies and uncertainty.
Accordingly, the Court dismissed the appeal, endorsing the Tribunal’s findings of unfair dismissal due to procedural defects in the redundancy process.
Holding and Implications
The Court’s final decision was to DISMISS THE APPEAL, thereby upholding the Tribunal’s determination that the Claimant was unfairly dismissed.
The direct effect is that the Tribunal’s judgment in favour of the Claimant stands, confirming procedural unfairness in the redundancy dismissal. No new legal precedent was established; the Court applied existing principles to the facts, emphasizing the necessity of objective, transparent, and consultative redundancy procedures. The decision underscores the importance of union consultation and verifiable selection criteria in redundancy situations.