3.3 Ensuring fairness – Genuine redundancies and selection
Redundancy is one of the potentially fair reasons for dismissal. However, in order to avoid claims for unfair dismissal after making an employee redundant, you will need to demonstrate the following:-
- That the employee was dismissed due to a genuine redundancy situation.
- That those you select for redundancy are selected fairly.
- That you entered into a period of appropriate consultation.
Genuine Redundancy Situation
A Tribunal will not question an employer’s business reasons for restructuring or closing parts of its operation, however it will question an employer’s motives where it feels that a redundancy has been made in order to manufacture an employee’s exit from the business. It is therefore extremely important for an employer to be able to demonstrate that a genuine redundancy situation exists.
A genuine redundancy may arise where there is a cessation or a reduction in work. This could be due to external economic issues such as recessions or due to advancements in technology. It may also occur where there is an internal restructure – for instance removing a layer of management or where a business is closed down entirely.
Employees must be pooled into appropriate groups. This may be on the basis of their job title or the department in which they work and both full and part time employees should be included together. All employees in the same pool should be subject to the same selection method.
It is essential that employees are pooled fairly. It is therefore advisable to discuss the pools with them during consultation (see Lesson 4) to ensure that they feel they are in an appropriate pool. If an employee is pooled unfairly and they are made redundant then they are likely to bring a claim for Unfair Dismissal.
If it can be justified then an employer is able to put an employee in a pool on their own. In such pools or in pools where it is likely everyone will be made redundant, there is no need to apply a selection criteria as you do not need to choose between employees. In situations, however, where only some of the employees in the pool will be made redundant, it is important to ensure that a fair selection criteria is devised.
Choosing a Fair Selection Criteria
Whether you decide to select your employees via a selection matrix that reflects areas such as qualifications, performance, productivity, punctuality and disciplinary record or you simply make each employee re-apply for their roles, it is important to ensure that scoring is done fairly and consistently and that this fairness and consistency can be demonstrated if challenged.
Employers should avoid potentially discriminatory selection criteria. For instance, scoring employees on the basis of whether they work full or part time may give rise to a claim for sex discrimination. Similarly, a simple Last in First Out selection criteria may also be discriminatory on the grounds of both sex and age. Despite this, however, length of service can be used as part of an overall criteria, as long as it does not have a disproportionately high effect on it.
Employers can use attendance records as a method to score employees, however they must ensure that any periods of family friendly leave is discounted, including time off for medical appointments for pregnant employees. It may also be advisable to discount disability related absences as a reasonable adjustment.
Applying the Selection Criteria fairly
Once an employer has devised a fair selection criteria, it is essential that it is then applied fairly. For instance, it is likely to be unfair to give an employee who has hit 99% of their target a substantially worse score than an employee with 100%.
If an employee considers that they have had the criteria unfairly applied to them, they may bring a claim for Unfair Dismissal.
Consulting regarding the matrix and the scores
The employer should use the consultation period (see lesson 4) to discuss with employees the selection matrix that will be used before it is applied to each member of staff. This gives them the opportunity to raise any issues they may have with it.
Once the selection matrix has been applied and employees have been provisionally selected for redundancy, their scores should be discussed with them. Not only will this ensure that they fully understand the reasons why they have been chosen, it will also give them the opportunity to correct any errors that may have occurred during the scoring process.
This is the process where an employee who may otherwise be made redundant moves from a role at risk of redundancy to a role already filled by another employee. This has the effect of making the second employee redundant (unless they secure a role elsewhere). Typically you will see this happen in circumstances where a highly qualified or experienced manager moves into a more junior role. Typically it does not need to be considered unless the employee makes reference to it.
This is a large area and will be explored in more detail in Lesson 4.
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