When considering making any employee redundant, the process followed by an employer is critical. A failure to follow procedure can be a point of attack by an employee (or employees) and, worst case, could result in a finding of unfair dismissal in an employment tribunal.
Part of a fair redundancy process includes how you, as the employer, identify which individuals could be made redundant (sometimes known as ‘at risk’ of redundancy) and if there is more than one individual at risk (or in ‘the pool of selection’), how you select which employees are made redundant.
In certain circumstances, generally where there are more than 20 employees affected and collective consultation must take place, employee representatives and/or trade unions should be consulted about the pool of selection and selection criteria proposed to be used. Hopefully it will be possible to agree both.
Remember that employees with at least two years’ service are entitled to a statutory redundancy payment. The current maximum payment is £17,130 (6 April 2022 – 5 April 2023). This is based on the current cap on a gross week’s pay, which is £571 (6 April 2022 – 5 April 2023).
Contact Julie Temple
If you are an employer that would like advice on selecting employees for redundancy email.
Redundancy situations
A redundancy can occur where there is a business closure, a workplace closure, or a reduction in numbers of employees carrying out a particular role. In a business or workplace closure, it is likely most (if not all) employees will be affected, and a selection process is unlikely to be needed.
A potential redundancy situation exists if, as an employer, you have ceased or intend to cease
business for the purposes of which the employee was employed
to carry on business where the employee was employed or,
the requirements of the business have ceased or diminished, or are expected to cease or diminish, for employees to carry out work of a particular kind or of a particular kind in the place where the employee was employed
The approach to the redundancy selection
The approach to selection will be important if there is a reduction in numbers.
If there is a reduction in numbers (or a need to select despite a business or workplace closure for some reason) a selection process should involve considering and:
dentifying who carries out the work affected by the reduction as well as who could carry out that work and, if there is more than one place of work, where the individuals work and whether that has an impact on who is at risk. The individuals you identify are likely to form the selection pool.
setting selection criteria to choose who will be made redundant from the pool; the criteria used should, where possible, be objective and based on evidence which exists and can be cross-referenced. For example, based on skills, qualifications, training, experience and disciplinary record.
criteria that could be discriminatory due to sex, race, age, disability, sexual orientation, gender reassignment, marriage or civil partnership, pregnancy or maternity or religion or belief or on grounds of fixed-term or part-time status should be avoided or adjusted (for example absence records and performance against target might need to be adjusted if there have been maternity or disability related absences).
each individual in the selection pool the employer has identified should be scored against the selection criteria to decide who are provisionally selected for redundancy and it is these individuals that a consultation process must take place with. Through this consultation process the scoring might need to be revisited if challenged by any individual.
