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Redundancy pooling and selection

Redundancy pooling and selection is one of the most tricky aspects of a redundancy process so read this Quick Guide to help you avoid the pitfalls.
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A redundancy pool is a group of employees from which redundant staff will be selected. A redundancy pool is not relevant in smaller businesses, where only one employee performing a unique role is being made redundant.

Each pool typically includes employees who currently perform the same or similar roles or employees with the same or similar skills in other roles. This means that you may need a few different redundancy pools for different business divisions or areas (eg marketing, sales, IT).

Redundancy pooling is not usually relevant where there is no need to select between employees performing a similar role (ie where a particular role will no longer exist, with no replacement or an entire workplace will shut). This will mostly be the case for small or micro businesses, where employees perform their role individually.

Choosing the right redundancy pools has a subjective element and there is no single right approach but the employer must act reasonably and take care to avoid illegal discrimination.

After choosing the pools, the employer must decide how to select between employees within that pool. It's usually best to create a selection matrix/score sheet to grade and compare the skills, experience and performance of the pooled employees. Employers must ensure that the all employee information is processed in accordance with their Data protection policy and employee privacy notice - a statement describing how you collect, use, retain and disclose personal information. For further information, read Data protection and employees.

In choosing the criteria, try and think about the workplace attributes and skills that are necessary for the business to succeed in the future and the specific requirements of the remaining roles.

The best criteria to use are those that are capable of beingĀ objectively measured and supported by evidence. Where it's necessary to use subjective criteria, consider having more than one person perform the grading.

Selection criteria may include things like:

  • attendance record

  • disciplinary record

  • skills or experience

  • appraisal ratings

  • relevant qualifications

Make sure the grading is performed fairly and consistently, based on reliable information.

Take care to avoid discriminating in choosing or applying selection criteria. For example, absence due to maternity leave or disability should not be taken into account.

Some workplaces have a customary arrangement or an agreed procedure for redundancy pooling and/or selection. If this exists then you should stick to it or have a good reason for departing (and if there is an agreed procedure then any changes should be agreed).

Once you have a proposal on pooling and the selection process, you should consult with at risk employees (or their representatives, eg a trade union representative) over that proposal before performing the selection exercise. Consider using a redundancy consultation letter for this purpose.

Consult with an open mind and be willing to change the methods if valid points are raised. After you have applied the selection criteria and have provisionally identified employees for redundancy, you will need to consult further with them including over their selection and the scores they received, which you will need to show them. You do not normally need to show selected employees the scores that other employees received. If there is a compelling reason to do this then make the scores anonymous (as far as practicable).

In practice, the redundancy pooling and selection exercise is the aspect of redundancy most likely to go wrong or to be challenged. Special additional rules apply where 20 or more employees will be redundant and you should Ask a lawyer for advice in this case.

You should consider setting up an appeal process for employees who feel they have been unfairly selected. This can reduce the chances of someone making a claim against you to an employment tribunal.

You should set out the appeal process and how an employee can appeal in your redundancy plans. The appeal process may involve meeting the employee and listening to their concerns or asking them to write a letter explaining they disagree with your decision. For more information, read Appealing decisions made by employers.

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