Employer’s Guide to Redundancy Selection Criteria
The pandemic continues to impact on businesses across the UK and even with the welcome news of the extension of the furlough scheme to the end of September 2021, many employers are forced to make cuts to staffing levels.
We have previously set out guides for employers on the subject of redundancy, such as our essential guide and also our guide to redundancy planning.
We also looked at the subject of redundancy selection by focusing on the legal position regarding ‘last in first out’.
In this article we further examine the subject of redundancy selection by examining the types of redundancy criteria to use to ensure that any redundancy process is fair.
What are selection criteria?
Selection criteria are used to make decisions as to which employees are going to be selected for redundancy in circumstances where there is a group of employees at risk of redundancy.
They are used to ensure that the process of redundancy is carried out fairly and that employees are not selected for redundancy for discriminatory or biased reasons.
In short, your selection criteria are your best defence against an unfair dismissal claim.
What are selection pools?
When you have identified that you need to make redundancies across different types of role, each of the groups of affected roles are known as a ‘selection pool’. For example, if you must make redundancies from a team of Accounts Administrators and from a team of Sales Executives, each group is a selection pool and should contain everyone with the same, or similar role.
In this example, the company has 4 Accounts Administrators and 3 Sales Executives, for the purposes of this example, all the employees have over two years’ service. You need to remove 2 Accounts roles and 1 Sales role.
Remembering that it is the role that is redundant and not the individual; all the Account Administrators and Sales Executive’s would need to be placed at risk of redundancy and a set of selection criteria agreed with the affected staff during the redundancy consultation. The employees are then scored based on those criteria and those scoring the lowest will be selected for redundancy.
If you didn’t adopt this approach and simply removed the persons whom you preferred to lose, you leave yourself open to claims of unfair dismissal, automatic unfair dismissal and possibly discrimination if for example you happened to select the person who is about to go on maternity leave, or the one who has just raised a grievance alleging racial harassment.
What types of selection criteria should be used?
The best way of looking at redundancy selection criteria is to view them as a means of selecting which employees are going to stay with the company rather than a means of selecting those who are going to leave. In doing so you are more likely to focus on criteria that are robust and fair.
To ensure that selection criteria are fair, they should be as objective and measurable as possible. The more subjective they are, the greater room there is for challenge because this is where personal opinions start to creep in.
Let’s look at some examples of effective selection criteria:
- Attendance records.
This is a good example of selection criteria because (assuming your attendance records are accurate) they are clearly measurable and objective.
However, there is a discrimination trap here. If you are using attendance then you must ensure that time off work due to disability related absences, pregnancy related absence or authorised absences for time off for dependents are removed.
- Disciplinary records.
On the surface it is an effective criterion because it is measurable and objective but you must ensure that only live warnings are taken into consideration. Informal warnings should not be considered nor should any formal warnings be considered where a fair disciplinary procedure has not been followed.
Again, measurable and objective as long as the qualifications are directly relevant and essential to the role.
- Length of service.
This is as measurable as they get. Just make sure that you seek advice as to whether any previous periods of employment, or time spent with the company under a temporary contract, should be taken into account.
- Standard of work, work performance- skills based matrix.
This is one that many employers are very keen to use because it is understandable that you want to be left with the best employees following a redundancy exercise.
There is a lot of room for error or accusations of bias here though. You need to think very carefully about the essential skills required for the role going forward, how they will be scored and who will be allocating those scores. It is always better, where possible, to have more than one person carry out any skills-based matrix scoring exercise. Refer to performance reviews, any customer feedback etc., so that your assessment is as objective as possible.
Selection criteria to avoid:
Heavily subjective and opinion based, plus it may expose you to risks surrounding discrimination if, for example, you were to apply a low score to someone who has had to have time off due to childcare.
Again, this could favour those employees who do not have caring responsibilities at home and is best avoided.
Avoid, avoid avoid. As loaded a criterion as they come, this one will cause you nothing but grief and is perhaps the least objective criteria you could use.
When would selection criteria not be used?
If you need to remove a role which is what we would call a ‘stand-alone’ or ‘single-post’ i.e., it is the only role of its kind in the company and there are no other roles like it anywhere else in the organisation.
If you are using ‘last in first out’ for any employees who have fewer than 2 years’ service with the company and you have identified, having sought our advice, that there aren’t any potential discrimination issues.
And finally……Our experts will be able to guide you as to the best criteria to use for your business and also the ones to avoid. This is something which you can very easily get right but is also one of the main reasons why many unfair dismissal claims for redundancy succeed. Call us today. Please quote your Client Account Number on all correspondence and telephone calls. 24-hour client advice line: 0800 151 2935.