Employers should be aware that whilst making someone redundant is a fair reason for dismissal, it is important to get the process right, as otherwise, they could still land in trouble in the employment tribunal. A fair redundancy process involves four things. These can be summarised as follows:
- Reasonable selection pools
- Reasonable selection criteria and scoring
- Consideration of alternative employment
This involves an initial announcement or warning to those affected that you are considering making redundancies and individuals are entitled to a one to one meeting. This meeting should be conducted with an open mind and employers should genuinely listen to employees who may come up with alternatives to redundancy which had not been considered. This consultation process is extremely important.
Unless the employer is planning to make more than 20 people redundant, there is no legal timetable for consultation. However, it should take place at an early stage and allow employees enough time to make suggestions and present ideas on why they should not be dismissed. Ideally, at least two meetings should take place before the decision to terminate employment is confirmed.
Finally, employers should not forget to consult with all those affected, including those on maternity or other parental leave or on long term sick leave.
2. Reasonable selection pools
Unless you are removing one particular role which is unique or a whole department or team, you will need to identify a pool of people from which you then select individuals for redundancy. Employers have a choice about how narrow or wide the pool is, and tribunals rarely interfere with this choice provided that the employer can show that they are not motivated by trying to achieve a predetermined outcome.
3. Reasonable selection criteria and scoring
This can be difficult, requiring a list to be drawn up of fair and objective criteria to apply to those in the pool before then making selection based on the scoring. Typical selection criteria include attendance, disciplinary record, performance, skills, qualifications and length of service. You can also apply a weighting to each category so that some categories carry more weight than others. This should not be too complex, as you may find yourself having to show that you did not design it to target particular employees.
It is also important not to use criteria which may discriminate on grounds of disability or pregnancy, for example. Thus, absence relating to pregnancy or other types of family leave should not be included. Ideally, two managers should assess and score, with an average taken or some moderation of different manager’s scores. This is to avoid allegations of bias from individuals selected.
You should not show employees other people’s scores, but you can give an average score or show the complete scoring matrix but anonymise the individuals. We can provide examples of a redundancy scoring matrix.
4. Considering alternative employment
Finally, the employer must take reasonable steps to establish whether there are any other positions either within the immediate business or elsewhere if it is part of a large group. Even if such positions may be considered to be beneath the person selected for redundancy, the opportunity should still be made available for the employee to accept or decline. It is very easy for the person selected to claim later at the employment tribunal that if the lesser role had been offered they would have accepted it.