The pool of employees for selection when making redundancies

Part two of ‘Seven things to think about when making redundancies’ series

2. The pool for selection

Once an employer has concluded that it will probably need to make one or more employees redundant, then it will have to decide which employees should be considered. To apply selection criteria fairly there will need to be a clearly defined group – or ‘pool’ – of employees from whom those to be made redundant will be selected.

How wide or narrow that pool should be is a matter for the employer to decide, but it is something to which careful thought should be given.

Sometimes the employer may decide that the appropriate pool for selection consists of just one person. This has the advantage of removing the need for a selection process – but the employer needs to be careful. It may be argued that the employer has created the redundancy situation simply to engineer the dismissal of that particular employee.

A ‘pool of one’ may be appropriate where that employee is in a unique position in the workplace and his or her work is being discontinued for business reasons. But the employer should consider carefully whether there may be other employees with similar skills who could also be considered as part of the redundancy exercise.

Suppose the need for redundancies arises because one particular product line has been performing badly. It may seem natural that any redundancies should be made from among the employees working on that product, but that may not be the best or most reasonable way to proceed.

If the skills of employees working on different products are largely interchangeable, then a wider pool for selection would give the employer the best chance of retaining the most skilled and best performing employees in the workforce.

That might mean making an employee redundant from a more profitable product line and moving an employee from the badly performing product to take his or her place. Making an employee redundant from one department when the actual redundancy has arisen in another is often referred to as ‘bumping’.

The employee who is dismissed as a result will still have been made redundant – and will potentially be entitled to a redundancy payment. They may feel that it is unfair that they should be selected when it was not their department that was performing badly, but the employer is entitled to base its selection on retaining the workforce that best meets its future needs. As long as it has properly addressed its mind to the issue and reached a decision based on business reasons that it is able to explain, then a Tribunal should find that it was a reasonable approach to take.

For legal advice about making redundancies contact Andrew Masters on 01227 763939 or email asm@furleypage.co.uk