First Scottish Searching Services Ltd v McDine & Anor

In a redundancy dismissal, an Employment Tribunal must assess whether the employer acted reasonably within the statutory band of reasonable responses. It must not require a perfect selection system or infer actual unfairness merely from a perceived risk in the system. Detailed scrutiny of scoring criteria is generally inappropriate where the system is broadly fair and has been reasonably applied. The Tribunal must consider each employee’s position separately, including the effect of objective criteria such as length of service. A dismissal cannot be held unfair solely because scores for employees from different businesses were not subject to an unspecified form of moderation, without findings showing actual inconsistency, material risk, or disadvantage.

The Respondent acquired the businesses of two companies in a TUPE transfer and later conducted a redundancy exercise. The Claimants, who had transferred from one transferor, were selected for dismissal using a scoring matrix containing objective and subjective criteria. Different managers scored employees from the Respondent and the transferor.

The Employment Tribunal held that the selection process and dismissals were unfair because there was no system for moderating the two sets of scores. The Respondent appealed, arguing that the Tribunal had substituted its own view for that of a reasonable employer and had treated a possible risk as established unfairness.

1. Appeal allowed. The Employment Appeal Tribunal substituted a finding that the dismissals were fair and dismissed the Claimants’ complaints.

2. Under Employment Rights Act 1996, section 98(4), the question is whether the employer acted reasonably in treating redundancy as a sufficient reason for dismissal, having regard to the circumstances and the substantial merits of the case. The Tribunal must not substitute its own decision for that of the employer. The statutory concept recognises a band of reasonable responses: more than one reasonable selection approach may exist.

3. The Tribunal erred by treating the absence of an unspecified moderation system as a fatal defect. It had made no findings of actual inconsistency between the managers’ scores, no assessment of the extent of the perceived risk, and no finding that moderation would have improved the Claimants’ scores or altered the outcome. A risk that scores might have differed after moderation did not establish that the dismissals were unfair.

4. The Tribunal had engaged in the microscopic examination of the scoring process discouraged by the authorities. Seeking to achieve perfection departed from section 98(4). Subjective criteria are not inherently impermissible, and the absence of a formal moderation process does not itself place a redundancy selection system outside the reasonable range.

5. The Tribunal also required to consider each Claimant separately and to take account of the substantial effect of length of service, an objective criterion which moderation could not affect. It should also have exercised caution before deciding the case on an unpleaded issue without explaining how that issue arose or whether the Respondent had fair notice.

• Employment Appeal Tribunal: allowed the employer’s appeal from the Employment Tribunal’s judgment registered on 23 June 2010. The dismissals were held fair and the complaints were dismissed.