Key Cases: Williams and Others v Compair Maxam

Redundancy Criteria:Williams and Others v Compair Maxam [1982] ICR 156[1]

When an employer is considering having to make redundancies in the company they are not able to cherry pick the employees that they want to keep on. They instead have to have a proper redundancy criteria from which they select the employees who are to be put at risk of redundancy. This redundancy criteria requirement was established in the case of Williams and Others v Compair Maxam.

In this case Compair Maxam was losing business and they knew they had to find ways to cut costs. Departmental managers decided to pick a team of core staff members who they felt they should keep on to keep the business viable.  They didn’t have any particular redundancy criteria but instead chose on personal preference and the Union was never consulted. This led to the other employees being dismissed on the grounds of redundancy. Some of the employees then tried to claim for unfair dismissal. They were unsuccessful at tribunal who said that the managers’ preference was a reasonable way of doing the job. They appealed this on the grounds of perversity and they were successful in the appeal.

Redundancy Criteria: The 5 principles

They held that there was an error in law when the tribunal came to this conclusion and that the dismissal selection was unfair. The Tribunal set out 5 principles which they felt the employers should act in accordance with and they should only depart from with very good reason. These principles are as follows:

1)   Early Warning: The employer should give as much warning as possible about the redundancies. This should allow the employee to inform them of all the relevant facts and consider alternative solutions.

2)   Consultation with Union: If there is a Union the Employer should ensure that there is consultation with a union. This is to ensure the best way that the desired management results can be achieved. The employer with the union should seek to agree the selection criteria that is going to be used.

3)   Fair Selection Criteria: If there isn’t a union the employer should attempt to establish criteria for selection which do not depends solely upon the opinion of the person making the selection. These criteria should be able to be judged against things such as attendance record, efficiency,  disciplinary record, experience etc.

4)   Fair Selection in accordance with criteria: Once the employer has decided upon the fair selection  criteria the employer then needs to ensure that the selection is made in accordance with these criteria (and if there is a union to consider any recommendations they make as to the selections)

5)   Consideration of alternative employment: The employer will seek to see if instead of making employees redundant he could offer alternative employment to them instead.

They do carry on and say that in the simplest form that the employer should “as much as is reasonably possible should be done to mitigate the impact on the workforce and to satisfy them that the selection has been made fairly and not on the basis of personal whim.

So if your employer is making redundancies and they are not following these principles it is possible that a tribunal might classify the dismissal as unfair. If you feel that this is the case then please do not hesitate to contact us on 0800 014 8727