Employer Discretion on Selection Pool for Redundancy

In Lomond Motors Limited v Clark UKEAT 0019/09, the Employment Appeals Tribunal (EAT) held that employers have a wide measure of flexibility when selecting a pool for redundancy. This is good news for employers.

Mr Clark was an accountant with Lomond Motors Limited (Lomond). He was dismissed for redundancy and brought a claim for unfair dismissal. Lomond had four garages. Two (Lomond West) were covered by one accountant, the other two (Lomond East) were covered by two accountants, one of them being Mr Clark. Lomond carried out a redundancy exercise to reduce the number of accountants in Lomond East to one. The selection pool for redundancy was Mr Clark and the other Lomond East accountant and Mr Clark was subsequently dismissed on the basis of his shorter length of service. Mr Clark argued that the selection pool should have included all three of Lomond's accountants. The Employment Tribunal upheld Mr Clark's claim. Lomond appealed.

The EAT overturned the Tribunal's decision. In reaching its decision, it considered many factors, including that Mr Clark had been employed at Lomond East for over a year, Lomond East was a wholly owned subsidiary group of Lomond, Lomond East was a "separate work centre" and Mr Clark worked solely for the benefit of Lomond East. These factors meant that it was reasonable of Lomond to restrict the redundancy exercise to a selection pool of two. The EAT held that "employers are to be afforded a good measure of flexibility in the determination of the pool and a finding that their judgment was unreasonable must be based on a sound rationale".