How to fairly select employees for redundancy

How can employers make sure they're selecting employees for redundancy fairly? Employment lawyer Matthew Ainscough of Bell & Buxton incorporating Ironmonger Curtis explains the fair selection criteria and process.

With the recent ending of the government’s Coronavirus Job Retention Scheme (Furlough), it is likely to be an unfortunate fact that many employers will be faced with making sections of their workforce redundant.

It is crucial that any employer looking at redundancies follows a fair procedure, and part of that procedure could involve having to decide which employees to select for redundancy. So, let’s have a look at how an employer can ensure that the selection process is conducted fairly.

The redundancy selection process

A fair selection process involves the fair application of objective selection criteria to a pool of employees. An employer should begin by identifying the pool. The pool is a group of employees from which the employer will select those who are to be made redundant.

Identifying an appropriate pool

Before selecting an employee or employees for redundancy, an employer must consider what the appropriate pool of employees for redundancy selection should be, otherwise the dismissal is likely to be unfair. There are no fixed rules about how the pool should be defined and an employer does have some flexibility.

So, if an employer has ten Customer Service Agents and has identified that it only requires five of these roles, the employer would be expected to pool all ten Customer Service Agents together and then select the five that are to be made redundant from this pool of ten. However, in some circumstances it might be appropriate to place an employee in a pool of one.

Employers should carefully consider the choice of pool; a good starting point for drawing up the pool is what the employee actually does in relation to their day-to-day activities and the terms of their contract. However, the reality of the situation should be looked at, rather than what the contract says about what the employee is required to do.

Redundancy selection criteria

As well as considering the reasonableness of the selection pool, the Tribunal will consider whether the selection criteria used by the employer are reasonable.

Using objective criteria

In order to be reasonable, the redundancy selection criteria ideally should be both objective and capable of independent verification. In other words, the criteria should be justifiable, rather than just being based on personal opinion. They should also be discussed with any recognised trade unions at the start of the process.

Potentially fair selection criteria include:

Performance and ability
Length of service
Attendance records
Disciplinary records

If the criteria are based on subjective grounds, it is likely to be unfair. This is to ensure that an employee is not selected by a manager because the manager does not like them, or for a discriminatory reason (i.e. because they are pregnant). Some examples of criteria that have been rejected by tribunals as too vague or subjective include:

Employees that would keep the company viable
Employees best suited to the needs of the business
Cost savings
Attitude

Attitude in particular is best avoided by employers, as it is too difficult to measure and is often based on personal opinion.

Discriminatory selection criteria

prevent-discrimination-protect-business

Employers will need to ensure that the redundancy selection criteria do not discriminate directly against any of the protected characteristics (sex, maternity or pregnancy, marital status or civil partnership, age, race, disability, sexual orientation, gender reassignment, or religion or belief), or on grounds of fixed-term or part-time status.

Employers should also watch out for criteria that might have an indirectly discriminatory effect, for example length of service could be indirectly discriminatory on the grounds of both age and sex, and similarly the use of attendance records could raise issues of sex and/or disability discrimination. Employers are advised not to solely rely on these criteria and make sure that other objective factors are also used.

Employer discretion over selection criteria

A tribunal shouldn’t interfere with the selection criteria chosen by the employer. It can only really interfere with the employer's choice when the criteria used are those which no reasonable employer would have used.

Employers should also note that Tribunals do not generally get involved with the detail of how individual scores are arrived at and will instead focus on whether the employer has a good system in place for assessing employees against the criteria.

Fair application of selection criteria

Employers should also be aware that if fair selection criteria are unfairly applied, the dismissal will be unfair. For example, it would be unfair for an employer to award a low score to an employee with a perfect attendance record.

Employers should not assume that "giving the benefit of the doubt" to the employee on maternity leave will be the safest option for them, in terms of vulnerability to claims. Employers should assess the possible ways in which the unfairness of a maternity absence can be mitigated, rather than automatically favouring the employee above others.

Employees should be consulted about scores

The employer should disclose individual scores to the employee, explaining how they were arrived at, and give the employee a chance to challenge the scores during an individual consultation meeting.

Written by Matthew Ainscough

Matthew Ainscough is a Fellow of the Chartered Institute of Legal Executives (FCILEx), specialising in discrimination and employment litigation. He is a Senior Associate and Head of Employment Law at law firm Taylor & Emmet Solicitors. He writes about specialist employment law topics and issues.