Getting redundancy selection criteria right: lessons from the Employment Tribunal

Blog

06.06.2025

The Employment Tribunal in Norman v Lidl Great Britain Ltd found that an employer who had favoured individuals with a degree qualification for retention in a redundancy procedure had (a) followed an unfair process and (b) indirectly discriminated against the employee on grounds of age. In a recent remedy hearing, the successful claimant was awarded over £50,000 in compensation.

The case serves as a cautionary reminder for employers to ensure that redundancy processes are both procedurally fair and rooted in well-considered selection criteria.

What happened in Norman v Lidl?

Background to the claim

The claimant, who was in his 60s, had worked for Lidl for over two decades. In early 2023, Lidl initiated a restructuring of its regional property offices, reducing the number of individuals in the same role as the claimant from three to one. A selection matrix was used to determine who would remain, with criteria including experience, knowledge (which included construction qualifications), skills, performance, and disciplinary record, each scored out of four.

The claimant scored 17 out of 20, narrowly missing out to a younger colleague who scored 18. The key differentiator was the "knowledge" criterion – the claimant’s colleague received a higher score against this field, as he held a university degree. The claimant, who did not have a degree, was subsequently selected for redundancy.

The claimant brought a tribunal claim for unfair dismissal and indirect age discrimination on the basis that the inclusion of having a degree in the redundancy selection criteria disadvantaged older people.

The tribunal's findings

The tribunal found that the inclusion of a degree requirement in the selection process amounted to indirect age discrimination. Statistics presented by the claimant showed that individuals over 60 are significantly less likely to hold a degree than younger cohorts, making the criterion indirectly discriminatory against older employees. Lidl failed to submit any evidence to objectively justify the inclusion of the degree requirement in its selection criteria.

The tribunal also found significant failings in Lidl’s consultation process – the claimant was not given a meaningful opportunity to challenge his scores, and managers were instructed to destroy notes explaining the scoring rationale. The claimant was also invited to a second "consultation meeting" at which the decision to make him redundant had already been made, and his employment was terminated with immediate effect after only six minutes – the tribunal found the employer was only “seeking to go through a prescribed script and to confirm the outcome” rather than genuinely consult.

This lack of transparency and procedural fairness, among other concerns, led to the tribunal finding that an unfair process had been followed.

Compensation and the Polkey Principle

The Polkey principle, established in the case of Polkey v AE Dayton Services Ltd, requires the tribunal to reduce the compensation awarded to someone who was dismissed unfairly, if it is decided there was a chance that the individual would have been dismissed even if a fair procedure had been followed.

Polkey deductions generally reflect what the Tribunal believes the probability to be of the employee being dismissed in any event – and they can reduce the award by up to 100%.

In the case of Norman v Lidl, the tribunal reduced the claimant’s award by 50%, reflecting its conclusion that there was a 50% chance that the claimant would have been fairly dismissed had a fair process been adopted. This still left the claimant with an award of nearly £51,000 in compensation, in addition to the £17,000 in redundancy pay he had already received.

On the indirect discrimination claim, the tribunal found that – although the degree requirement was discriminatory – the claimant and his colleague would still have received the same scores against the "knowledge" criterion if the discriminatory requirement had not been applied, and the claimant would still have been selected for redundancy. The tribunal therefore determined that only an award for injury to feelings could be made in respect of this element of his claim.

What can employers learn from Norman v Lidl?

This case underscores the importance of:

Checking every element of redundancy criteria for discrimination:

Criteria that appear neutral or innocuous – like educational qualifications – can disadvantage certain groups in ways which are not always obvious. Employers must always assess every element of the criteria individually, and make sure those used are necessary, proportionate, and fair to all employees. Employers should also keep evidence of the business reasons for choosing particular selection criteria to ensure that it can be objectively justified in the event it is challenged.

Documenting the process comprehensively:

When it comes to assessing how an employee meets the redundancy criteria, it is important to:

record the rationale for each part of the assessment;
show how each part of the assessment is supported by evidence; and
only destroy notes in very rare circumstances.

Failing to produce this evidence can seriously undermine the credibility of the process, and can expose you to risks in tribunal proceedings down the line.

Consulting meaningfully and genuinely:

Employees should be engaged in the process and given genuine opportunities to respond and provide input – consultation meetings should never be seen as a "tick-box exercise". Likewise, individuals at risk should always be able to understand the assessments made about them, and have meaningful opportunities to challenge them.

Ensuring those managing the process are well-trained and well-briefed:

The tribunal found that the decision-makers in the Norman v Lidl case had “insufficient awareness of their roles and the level of detail required to objectively justify their decision-making”. Any redundancy process, even a relatively small one, needs to be carefully managed and overseen by HR and/or senior leaders, taking professional advice where needed.

How can employers get redundancy selection criteria right?

In a redundancy exercise, selection criteria must be carefully crafted, ensuring that the best employees – in terms of skills and expertise – are retained to meet the future needs of the business.

The criteria should be as objective as possible, and employers must be able to apply them in a fair and consistent way. This means that criteria should be capable of being measured, evidenced, and independently verified rather than being based on personal or subjective opinion. Tribunals have found subjective criteria – ranging from selecting employees "who, in the opinion of the manager concerned, would keep the company viable" or who are “best suited for the needs of the business under the new operating conditions”, to selecting employees on the basis of “attitude” or "cost savings" – to be too vague or imprecise to form a fair basis for selection.

Some examples of potentially fair selection criteria include:

performance and ability;
skills, qualifications and experience;
length of service (although beware of the “last in first out” rule – as below);
attendance records; and
disciplinary records.

However, even where criteria are potentially fair, you must always interrogate whether they might have discriminatory effects before applying them – for instance, if sickness or maternity-related absences are taken into account when weighing up an employee’s attendance record, this can open you up to claims of disability or pregnancy-related discrimination.

The "last in first out" (LIFO) method used to be a common method of redundancy selection. However, it may disproportionately disadvantage younger people, who are more likely to be newer hires, or women, who may have shorter continuous service due to career breaks. Relying on it as a sole or dominant criterion in a redundancy situation can therefore risk allegations of indirect discrimination on the grounds of age or sex. Given the tribunal’s willingness to call out age discrimination in the Norman v Lidl case, employers should approach the use of LIFO with caution. If LIFO is used as a criterion, it is more likely to be viewed as acceptable if used as part of a balanced set of criteria or as a "tie break" where all other factors are equal.

Employers can attach weightings to their selection criteria – reflecting the relative importance of each element – but it is important to remember that the weightings will themselves need to be objective and independently justified, in the same way as the headline criteria.

Conclusion

In a redundancy exercise, getting redundancy selection criteria right is crucial – not only to ensure legal compliance but also to maintain trust and transparency within your workforce. Fair, objective, and well-documented criteria are an essential element in ensuring that any subsequent redundancy dismissals are fair. Employers should note, however, that selection criteria are just one element in ensuring a fair redundancy process – defining the correct pool for redundancies and the fair application of selection criteria are equally important. You can read more about these in our blog post: Redundancy reminders: how to run a fair selection process.

With thanks to Tom Chapman, current trainee in the team, for his help in writing this blog.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.