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Redundancy Selection Pools

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If your business is making redundancies, you must be very careful when drawing up the pool of employees from which you’ll make a selection. Otherwise, you’re likely to make the dismissal unfair. This checklist highlights the key issues you need to consider.

Redundancy situation explained

Redundancies usually occur when a business ceases operation or moves to another location. A business may also experience redundancy when only fewer employees are needed to perform certain tasks.

Selecting the correct redundancy pool

A business must identify the correct redundancy pool to choose from before dismissing a specific employee. Otherwise, the dismissal will be deemed unjust and unfair.

Identifying the size of the redundancy pool

In law, it is not specified clearly how businesses should define a redundancy pool. If the redundancy pool is carefully selected and the grounds for choosing it are reasonable, the employee or an employment tribunal won’t be able to question your decision easily.

For instance, it is not advisable to select a redundancy pool based on the number of redundancies your business wants to make. However, you can do so provided that you have a valid reason. Also, you should refrain from focusing too much on the commercial risks of choosing a wider redundancy pool.

Key considerations to make when choosing the pool

Ask yourself these two questions when identifying the pool from which the redundant employee/s will be selected.

  • What are the tasks/processes in your business that are no longer necessary?
  • Who is responsible for these tasks/business processes?

If the link between the redundant tasks and the employees in charge of them is clear, it will be easier for you to identify and select the redundancy pool. To avoid unfair dismissals, you must also consider the following factors:

  • The number of employees with similar roles and the frequency of which they perform these roles.
  • The number of employees with interchangeable roles or tasks.
  • The union or the employee representatives’ assessment of the selection pool.

Check what your employees are doing

Make sure to check the daily activities of your workers and compare them with the terms of their contracts. Focus on the real situation instead of what they should do in theory as their contracts indicate.

Account for interchangeable roles/skills

  • Consider the following to avoid unfair dismissal claims:
  • It can be difficult to choose a specific pool if your employees excel at different fields, handle multiple tasks, or are required to fulfil different roles as stated by their employment contract. Some employees may oppose the redundancy label placed upon them, especially if they can prove that they have interchangeable skills.
  • It may be unfair to consider dismissing an employee on the grounds of redundancy simply because they are in charge of a task or process that is deemed unnecessary. It is also unreasonable to give a free pass to another worker who’s doing a different work that the first employee could easily do.
  • If an employee is previously in charge of a task other than the one that is deemed unnecessary, their skills are likely interchangeable. Therefore, your business will need a wider pool.
  • If the work is considered “low-skilled,” the skills are considered interchangeable.
  • If a worker can point to another employee who has interchangeable skills and renders less service than them, this may boost the argument that the other employee should be added to the pool.

“Bumping”

You can dismiss employees who are not affected directly by the redundancy situation. For instance, you can “bump” out workers whose tasks or roles are not labelled unnecessary. Then, you can fill these vacant roles with workers with redundant jobs.

Your business is not under any obligation to settle for this option. However, it may be more prudent to consider “bumping” workers than dismissing some of your employees unfairly.

Commercial risks of a wider pool

Some businesses may think twice about drawing up a wider redundancy pool because it can hurt employee morale. However, settling for a narrower pool may increase your risk of being accused of unfair dismissal. This also holds true when negotiating with the individuals who are being considered for redundancy

For this reason, it would be wise to weigh your options carefully and identify which is less risky: maintaining high employee morale or choosing a wider redundancy pool.

More information

If you have any questions about the content of this checklist, please contact Edward Aston eia@astonssolicitors.co.uk or 01327 706700