Contract Bottling Ltd v Cave & Anor

A dismissal is by reason of redundancy where the employer’s requirements for employees to perform one or more particular kinds of work have diminished and the dismissal is wholly or mainly attributable to that state of affairs. The employer need not construct its selection pool by reference to each kind of work for redundancy to exist. A defective, disparate selection pool may nevertheless make the resulting dismissal unfair.

When considering a Polkey reduction, a tribunal must engage with material and reliable evidence of the likelihood of dismissal after a fair process. Uncertainty and speculation do not justify treating such evidence as nonexistent.

The employer, facing financial difficulties, reduced its administrative and accounts workforce. It placed employees with widely different functions into one selection pool, used a subjective scoring matrix, and proposed retraining retained employees.

The Employment Tribunal upheld the respondents’ unfair-dismissal claims. It held that their dismissals were not for redundancy, found alternatively that any redundancy dismissal was substantively unfair, and made no Polkey reduction.

The employer appealed. The central issues were whether the dismissals were attributable to redundancy and whether the Tribunal had adequately addressed evidence relevant to a reduction in compensation.

1. The appeal was allowed in part. The Employment Tribunal erred in holding that the dismissals were not for redundancy. Applying Murray v Foyle Meats Ltd [1999] IRLR 562, the statutory inquiry has two stages: whether the employer’s requirements for employees to perform work of a particular kind have diminished, and whether the dismissals were wholly or mainly attributable to that diminution.

2. Both stages were satisfied. The Tribunal had found that the administrative staff were overmanned. A diminution may concern several kinds of work; it does not cease to be a redundancy situation because the employer chose an unusual or undifferentiated selection pool. Even dismissal of an employee whose own function continued, followed by reassignment of that work, could be attributable to the diminution in requirements for other kinds of work.

3. The error concerning the reason for dismissal did not undermine the Tribunal’s alternative findings of unfairness. Those findings assumed that the employer was entitled to select its pool. The subjective matrix, inappropriate assessors, lack of explanation for scores, absence of meaningful consultation, and appeal process were compelling grounds for finding the redundancy dismissals unfair. The appeal against unfair dismissal was therefore dismissed.

4. The Tribunal erred in stating that there was no evidence capable of supporting a Polkey reduction. The established need to reduce staff, actual redundancies, and evidence that accounting work would be reduced by a computer package required evaluation. Under Software 2000 Ltd v Andrews [2007] IRLR 568, uncertainty does not remove the duty to consider material and reliable evidence. The compensation issue was remitted to the same Tribunal to decide afresh, with reasons.

• Employment Appeal Tribunal: Held that the dismissals were by reason of redundancy, but dismissed the appeal against the findings of unfair dismissal. Allowed the appeal on the Polkey issue and remitted it to the same Employment Tribunal.
• Employment Tribunal: Judgment dated 8 February 2012 upheld the respondents’ unfair-dismissal claims, held that the dismissals were not for redundancy, and made no Polkey reduction.