Are you considering implementing staff redundancies and require more information about redundancy selection pools?

In the current climate many businesses are struggling, and if it wasn’t for the Government’s Coronavirus Job Retention Scheme (CJRS),commonly known as furlough, many would already have either reduced staff numbers or closed down.

Many people view the furlough scheme as delaying the inevitable and that once the benefits of the scheme are reduced and eventually the scheme ends, it is likely to result in largescale redundancies, affecting all types of businesses.

Currently the CJRS is scheduled to end on 31st October 2020 and the Government has recently introduced a series of more flexible measures coming into effect on 1st July 2020, aimed at getting staff back to work and are also asking employers pay more towards employment costs.

It is a sad reality that large numbers of redundancies are going to be inevitable given the magnitude of what the economy is facing.  It is therefore important that employers get it right in adopting fair processes as they can still be at risk of unfair dismissal claims and claims for protective awards involving large scale redundancies in the event of failing to consult in a full and meaningful manner.

Unless the business is completely closing down, in many cases redundancy will involve a decision being made about which employees to make redundant and which ones to retain.

In the event that roles are stand-alone or a particular employee undertakes a role that nobody else can undertake then the process will be relatively straight-forward.

However, where staff undertake the same roles within the business and there is a need to reduce the numbers because there is less work and/or a need to reduce costs then employers are advised to create a selection pool and to carry out a redundancy matrix or selection assessment.  This will involve scoring all staff in the selection pool on a variety of objective criteria.

Employers should not choose a selection pool based on who they would like to retain but must look at which members of staff are undertaking the same role or similar jobs.  This can also include staff doing the same work but at different locations and establishments.   Sometimes roles can be slightly different but if work is broadly interchangeable involving the same skill sets and abilities then those staff should be included in any selection pool.

Once the selection pool has been established then the line manager with the best knowledge of the staff skills and experience should undertake a scoring assessment using a matrix.   It is also best practice to get the scores reviewed ,agreed and signed off with another manager who is also familiar with those members of staff and their work.   Alternatively, two managers can undertake the scoring process together.

It is also recommended that all staff in the selection pool are given a copy of the blank selection scoring matrix so that they can flag up any important points before the scoring is undertaken.  By way of example, an employee might want to make the manager aware that they have additional qualifications that are relevant to their skills.

Which criteria should be used in a typical selection pool?

There is no legally defined set of criteria that must be used, however there are a number that are commonly used and which are likely to be lawful.   Here are a few:-

 

  1. Skills and experience, knowledge and qualifications

These are good objective criteria that can be used when scoring staff from a redundancy selection pool.  Skills can also be broken down into more specific areas, for example language skills, and use of new technology.

  1. Performance

This is aimed at keeping the best performing staff and again is completely objective.  Performance appraisals can be a useful tool, backed up with examples of good performance and feedback.  It could be based on sales targets being achieved or receiving above average appraisals.

  1. Attendance record

It is perfectly acceptable to use this as a criterion, especially where performance and/or skills do not provide much in the way of differentiation.  This does however come with a word of warning in that it is advised that care is taken in including staff with poor attendance due to long-term health conditions or child-care issues.   This could trigger exposure to disability discrimination claims where such issues are determining factors resulting in redundancy.  Pregnancy related absences and time off to care for dependants should also be disregarded as it will be direct sex discrimination to award low scores for these absences.

  1. Disciplinary record and conduct

This is another acceptable criterion, especially if previous disciplinary procedures have been fairly implemented.   Do be aware not to include disciplinary sanctions that have expired and are no longer on the record.

  1. Last in First Out

Historically this criterion used to be quite common in redundancy selection pools and was a way of rewarding long serving members of staff.  These days it is recommended that it is not used because you could be exposing the business to an age discrimination claim particularly from younger members of staff who could be at risk of redundancy and where this criterion is the determining factor.

  1. Flexibility and being a Team player

This is another good criterion to use where employers award higher scores to staff who are willing to go the extra mile, for example in working additional hours to increase productivity, or who are willing to do the work of others who are absent.  Higher scores can also be awarded to those who are flexible in their approach to their work, have initiative and think outside the box.

Any selection criteria that is used should be as objective as possible and should be substantiated with evidence.  Any scoring system allocating a particular score to a different criterion is the best way to demonstrate a fair and objective application of that criteria.

 

Once the scoring has been undertaken then those staff scoring the lowest out of the pool will be at risk of redundancy and will need to be informed.   Do remember not to disclose the scores of other staff in the selection pool as this will be in breach of data protection laws.  If the selection pool is small then it might not be possible to hide the scores of specific members of staff, but it should not be a problem as long as you do not purposely divulge the identities of staff scores to others.

There are of course further processes and procedures that will need to be implemented to ensure that any dismissals due to redundancy are fair and to minimise the risk of employment tribunal claims, which will no doubt be the subject matter of another blog.

If you have any questions about redundancy selection pools and scoring assessments then contact Steven Eckett, Partner and Head of Employment at Meaby & Co LLP.  seckett@meaby.co.uk or 020 7703 5034.