In part 1 of our back-basics guide for handling redundancies, we looked at how to plan the redundancy process and some of the key legal factors which determine when you should start redundancy consultation and how long it will take.
The next area to consider is the thorny issue of pooling and selection. Essentially, this is how you decide who is placed at risk of redundancy. It's one of the areas that employees most frequently challenge.
"Pooling" is grouping employees together so that you can apply selection criteria to determine which employees should be placed at risk of redundancy. Usually, employees with the same role/duties should be pooled together. So if you decide that you need fewer sales assistants at one store, for example, you would treat the sales assistants at that store as a pool, score them against your selection criteria and then tell the lowest-scoring assistants that they are at risk of redundancy (and then consult with them).
But it's not always that simple. Sometimes you may need to pool together individuals with different job titles where their responsibilities overlap significantly. Employees placed at risk of redundancy often argue that the pool should have been wider (as this might have made it less likely that they would be selected). Employers have a fairly wide discretion to choose the appropriate pool, but they need to address their minds to the issue and act reasonably in determining the appropriate pool.
It's not unknown for there to be a 'pool of one' - i.e. an employee whose job is unique and no longer required. But employers should take care; pools of one are open to abuse and tend to be scrutinised quite carefully by Employment Tribunals - particularly when the employee affected has a protected characteristic, has blown the whistle or previously alleged discrimination.
Selection is the process of scoring individuals in the pool against the employer's criteria. From a legal perspective, the more objective the criteria, the better. However, truly objective criteria (disciplinary record etc.) often aren't an effective way of identifying the best employees, so in practice businesses tend to use more subjective performance criteria. These can be fair if the business can explain and justify the scores, preferably supported by evidence (such as appraisals). Employers also need to consider carefully whether the proposed criteria could have a discriminatory impact and what can be done to mitigate that impact, and whether there are any issues of unfairness. For example, if furloughed employees are in a pool with employees who weren't furloughed, the employer will need to consider whether to look at historic performance rather than performance during the pandemic when carrying out scoring.
As with all aspects of the redundancy process, it's sensible to invest some time at the outset thinking through these issues, to minimise the likelihood of disputes with employees and ensure that the process runs as smoothly as possible. Unfair pooling and/or selection may result in a finding of unfair dismissal in the Employment Tribunal, damaging the business' credibility and requiring it to pay compensation. It pays to plan.
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