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Redundancy Selection

How do employers select employees for redundancy?

Redundancy is the reduction in the need for employers of a particular kind in a particular place.  Assuming a redundancy situation arises, the employer will need to use some form of criteria to select staff for redundancy when reducing the size of the team.

Example One: Reducing the number of designers in a team from eight to five. In that instance, the employer would normally put all eight designers at risk of redundancy and then select three designers for redundancy out of the pool of eight.

Example Two:  Everyone in the team of eight have different job titles, but their skills are largely interchangeable. One approach would again to put all eight members of the team at risk.  However employers often want to avoid doing so to avoid creating a sense of job insecurity.  In that instance, the employer might therefore want to narrow the pool as much as it can. Employers adopt a couple of different approaches in that case:

  1. Some employers will explain a rationale for putting only some members of the team at risk. That rationale is likely to focus on the main or predominant function of particular roles.  This may well be a fair approach if there is a reasonable basis for differentiating between different roles in the team on this basis.
  • Some employers apply pre-selection criteria, and then only put the lowest-scoring team members at risk. However this approach can be criticised as pre-judging the process, and therefore potentially being unfair. Affected staff should normally be consulted with on the redundancy selection criteria before each member of staff is scored.
  • Some employers will however just put all members of the team at risk and invite them all to apply for the remaining roles (see below). This is a fair approach, but might create problems if the person you want stay, does not apply for a role

Example Three: Out of a team of eight, only one person is a designer, and you no longer need to employ a designer. In that case, only one person might properly be put at risk of redundancy.

In general terms, an Employment Tribunal is unlikely to challenge the basis on which an at-risk redundancy pool is drawn up, as long as there is a genuine business rationale for the approach adopted. If however a Tribunal concluded it had been engineered solely to target a person that management did not like, it would be unfair. 

A prudent employer should be ready to explain how the at-risk redundancy pool was drawn up, and if possible, to document the basis for that approach.

What Criteria should be used to select for redundancy?

Assuming you have a pool of (say) eight employees from which you wish to select three for redundancy, there are basically two different approaches:

One: Use a redundancy selection matrix. The employer can choose to score each employee on a number of criteria which might include i) length of service ii) appraisal scores over the last two years iii) attendance record iv) disciplinary record v) relevant training in the last two years vi) relevant skills vii) qualifications. The employer has reasonable discretion in drawing up a list of criteria which suit it. 

As far as possible, the employer should rely on objectively measurable criteria, or make it evidence based.  If the criteria is more subjective (for example suitability), the manager carrying out the scores should write a paragraph explaining the rationale for the score. 

Take care to ensure that the redundancy score is not indirectly discriminatory (for example if someone is scored down for their sickness record, but they were off sick due to their cancer – or someone is scored down for their ‘ability to learn new skills’ but assumptions have been made due to their age)

The employer should normally consult affected staff on the redundancy selection criteria before each employee at risk is scored. This means that the employer should reasonably consider any feedback the employee may have on the list of criteria, but is not necessary obliged to agree.

Potential problems can be brought to light during consultation. For example Jennifer complains about appraisal scores being relied on over the past two years because she was on maternity leave for one of them. The solution in that case might be to rely on the last two available appraisal scores for which she was present for the whole year.

Two: The other main approach is to interview everyone in the at-risk pool for the remaining number of candidates. 

If the employer does this i) ideally there should be an interview panel of two or three, each scoring each answer ii) all candidates should be asked the same questions iii) notes from the interview of each panel member should be kept.

Whether you are an employer or employee, call a redundancy solicitor on 0207 118 0950 to discuss your redundancy issues.

See our Redundancy Calculator to see the statutory redundancy payment and notice entitlement you will receive if you are made redundant.

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