In many cases redundancy will involve a decision being made about which employees to make redundant and which to keep. Perhaps you are simply reducing the numbers in a certain role, or have changed the roles and need to decide which employees fill the new ones and which are made redundant.
But how can you make sure you make the right choices to get the results you need for your business and to protect you from unfair dismissal and other claims?
Choosing who to include
If you need fewer employees but need to keep some of them, you will need to work out who needs to be included. You cannot choose a pool based on who you’d like to keep. You must look at which employees are doing the same, or similar jobs. There will often be debate about whether a person should be included in a pool or not, where perhaps their job is slightly different.
After a TUPE transfer, you may find you have too many employees doing a similar job for the amount of work you have, due to a number of staff doing that role transferring in. But you would need to include your current employees doing similar work in a pool, not make the transferring staff redundant.
Similarly, it may be that employees doing similar roles from other parts of the business should be included. You may for example have a support department, such as administration, where employees usually work mainly with one particular department. If you close that department, and need one fewer administrator as a result, then it may seem obvious that the administrator usually linked with that department should be the one you lose. But depending on how things work and the other staff you have, it might be necessary to pool all the admin staff and apply selection criteria.
Which selection criteria to apply
There are not specific set criteria that have to be used, but there are a number of criteria that are commonly used and which are likely to be lawful:
Skills, knowledge, experience and qualifications
These are good criteria to apply as they are more likely to get the most suitable employees to fit the roles you have going forward. They are also more likely to be criteria you can objectively justify.
Performance levels
Again, this is a good criterion in terms of getting the right result for the business, as you of course want to keep your highest performers. The problem comes with demonstrating this objectively.
If you have recent performance appraisals well-completed with solid feedback and evidence, this will help. Or sales figures, or other objective and quantitative evidence of performance. Reliance on the opinions of line managers without actual evidence of performance is risky and subject to argument and challenge.
Attendance
This can be acceptable to use, particularly where performance or skills criteria are difficult or won’t provide sufficient differentiation. But be careful about possible discrimination with attendance. If someone has poor attendance due to a long-term health condition or personal circumstances, they may be able to challenge a selection for redundancy where that has been a factor.
You should disregard emergency dependents’ leave for the purposes of redundancy selection, and pregnancy-related sickness absence, and should consider adjusting the criteria for employees with disabilities.
Conduct
Another acceptable criterion would be disciplinary record – if someone is on a final warning or has a poor disciplinary record, this is another criterion that can be fairly easily substantiated with evidence.
Last in first out
This used to be a very common criterion to use, on the basis that rewarding long-serving employees and letting recent starters go felt fair. However it is no longer good practice and it risks a discrimination claim as younger workers.
As a general rule, any selection criteria used should be as objective as possible, and, as far as possible, should be substantiated with clear pre-existing evidence. A scoring system allocating a certain score to different criteria is the easiest way to demonstrate fair and objective application of the criteria.
You should consult staff on the criteria you propose to use, and how these will be scored, so that they have the opportunity to raise concerns with how this will happen and have their concerns and alternative suggestions considered.
Using applications
Another method sometimes used is to get people to apply for the jobs available, even effectively getting them to apply for their own job. A selection process similar to recruitment would then happen, with interviews or other selection methods.
This can work, particularly if the jobs are new, or might involve different responsibilities or skills. However bear in mind that an application process can be stressful, some people interview well and others don’t, and there might be groups who are disadvantaged by that process who might do well with selection criteria applied without them having to have an input.
If you’d like some advice on who to include in a redundancy pool or how to select fairly, do get in touch.