During the pandemic, there was a significant impact on businesses across the UK. Even with the welcome news of the extension of the furlough scheme to the end of September 2021, many employers were forced to cut staffing levels and implement selection for redundancy procedures. The pandemic was a poignant reminder of how important it is for every business to have a well thought out redundancy selection matrix for certain eventualities.
We have previously set out guides for employers on redundancy, such as our essential guide and our guide to redundancy planning.
We also looked at redundancy selection by focusing on the legal position regarding ‘last in first out’.
In this article, we further examine the redundancy selection by examining the types of redundancy selection criteria to ensure that any redundancy process is fair and you are using the appropriate redundancy selection criteria matrix.
What is a redundancy selection criteria?
A redundancy selection criteria is used to decide which employees are going to be selected for redundancy and placed in a redundancy selection pool for the unfortunate circumstances where there is a group of employees at risk of redundancy.
Selecting employees for redundancy is never easy, but there are specific strategies you can employ with fair selection criteria and redundancy process. A selection criteria for redundancy is used to ensure that redundancy is carried out fairly and that employees are not selected for redundancy for discriminatory or biased reasons. For this reason, it’s best to use a functional and well-tested redundancy selection criteria and scoring matrix to help you determine the important attributes each of the employees placed in the redundancy selection pool, such as the employee’s aptitude, and performance reviews and each employee disciplinary record.
In short, your redundancy selection criteria implemented through a ridged redundancy selection procedure is your best defence against an unfair dismissal claim.
What are redundancy selection pools?
When you have identified that you need to make redundancies across different roles, each of the groups of affected roles is known as a ‘redundancy selection pool’. For example, as part of your redundancy process, you must make redundancies from a team of Accounts Administrators and a team of Sales Executives. Each group is a selection pool, and each redundancy pool should contain everyone with the same or similar role.
In this redundancy selection criteria and scoring matrix example, the company has 4 Accounts Administrators and 3 Sales Executives; for the purposes of this selection criteria redundancy example, all the employees have over two years’ service. You need to remove 2 Accounts roles and 1 Sales role.
Remembering that the role is redundant and not the individual, all the Account Administrators and Sales Executive would need to be placed in the redundancy selection pool with the risk of redundancy and a set of redundancy selection criteria agreed upon with the affected staff during the redundancy consultation. The employees are then scored using a redundancy selection matrix based on the agreed redundancy criteria, and those scoring the lowest will be selected for redundancy.
If you didn’t adopt this approach of using a selection matrix for redundancy underpinned with fair selection criteria and simply removed the persons whom you preferred to lose, you leave yourself open to claims of unfair dismissal. Or perhaps even automatically unfair dismissal and possibly discrimination if 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 redundancy 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 will stay with the company rather than a means of selecting those who will leave. In doing so, you are more likely to focus on using a redundancy selection criteria matrix that is robust and fair.
To ensure that redundancy criteria are fair, they should be objective and measurable. The more subjective a selection criteria for redundancy is, the greater room there is for the decision to be challenged because this is where personal opinions start to creep in.
Let’s look at some effective redundancy scoring matrix examples:
1. Attendance records.
This is a good redundancy selection criteria example because (assuming your attendance records are accurate) they are measurable and objective.
However, there is a discrimination trap here. Suppose you are using attendance in your redundancy scoring matrix. You must ensure that time off work due to disability-related absences, pregnancy-related absences or authorised absences for time off for dependents are removed from your redundancy selection criteria and scoring matrix.
2. Disciplinary records.
On the surface, it is a practical criterion for your redundancy matrix because it is measurable and objective. Still, you must ensure that only live warnings are taken into consideration. Informal warnings should not be considered part of your redundancy selection matrix neither should any formal warnings be considered where a fair disciplinary procedure has not been followed.
Again, measurable and objective should be included in your redundancy selection criteria and scoring matrix, as long as the qualifications are relevant and essential to the role.
4. Length of service.
Length of service is as measurable as they get. Just make sure that you seek advice on whether any previous periods of employment or time spent with the company under a temporary contract should be considered when formulating the redundancy matrix.
5. Standard of work, work performance- skills based matrix.
Many employers are very keen to use standard of work, work performance and employee skill as key metrics embedded within their redundancy scoring matrix. Because, understandably, you want to be left with the best employees following the redundancy selection procedure.
There is a lot of room for error or bias accusations here. You need to think carefully about the essential skills required for the role going forward, how they will be stored within your selection matrix for redundancy and who will be allocating those scores. It is always better, where possible, to have more than one person carry out any skills-based redundancy matrix scoring exercise. Refer to performance reviews, customer feedback, etc. Your assessment needs to be as objective as possible.
Redundancy 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 within your redundancy scoring matrix 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 redundancy selection criteria you could use.
When would the redundancy selection procedure not be used?
The redundancy selection procedure would not be used if you need to remove a role that we would call a ‘stand-alone’ or ‘single-post,’ i.e., it is the only role of its kind in the company. There are no other roles like it anywhere else in the organisation.
If you are using ‘last in, first out’ as part of your redundancy selection criteria for any employees who have fewer than two 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 redundancy selection criteria to use for your business and also the ones to avoid. Having an effective and robust redundancy selection criteria matrix in place is something you can easily get right. Still, there are also certain pitfalls if your redundancy selection procedure is not set up correctly, leading to unfair dismissal claims. Call us today if you would like to bulletproof the whole selection criteria for redundancy process, we can help! Please quote your Client Account Number on all correspondence and telephone calls. 24-hour client advice line: 0800 151 2935.