Alvis Vickers Limited v Lloyd

Alvis Vickers Limited v Lloyd,
Employment Appeal Tribunal,
5 August 2005

Lloyd, who was one of nine export managers employed by Alvis Vickers Ltd, was made redundant. He complained of unfair dismissal.

A tribunal accepted that Alvis Vickers was justified in deciding not to consider any of the other export managers for redundancy: there was less work available in the areas Lloyd covered and the company wished to keep the others because of the relationships they had forged.

But it held that Lloyd had been unfairly dismissed because the other managers had not been specifically asked whether they were prepared to take voluntary redundancy, Alvis Vickers had not included more junior roles in its search for alternative posts and the manager conducting the internal appeal had not been independent.

Alvis Vickers was ordered to pay £55,000 compensation, not reduced on Polkey grounds (where an employer that fails to follow proper procedures can claim that it would have made no difference to the outcome) because, the tribunal said, it was too speculative to assess the chances of Lloyd keeping his job had procedures been fair.

But the Employment Appeal Tribunal held that it was illogical to say the company should have sought volunteers among other export managers while considering it reasonable for the company to seek to retain them, and wrong to hold that it should have investigated more junior positions when there was no evidence that any suitable posts were available, because Lloyd had never asked. But it upheld the finding of unfair dismissal because of the flaws in the internal appeal process. Even if the appeal had been fair, redundancy was inevitable, so the compensation order was cancelled.

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