Managing Employee Redundancies – Selecting Employees for Redundancy

Written by Andrew Johnson, Founder and CEO HRGuide - Thu 24th Oct 2024

Introduction - Follow the right process.

If you do decide redundancies are necessary, you should check if you have:

• a redundancy policy you must follow.
• check if you have a collective agreement with a trade union with details of what you must do

You must follow a fair redundancy process and this must include:

• consulting Employees
• collectively consulting employees if more than 20 are at risk of redundancy

You might not always be able to avoid redundancies, but by working with employees you could find ways to save jobs and better understand how to plan for the future.

1. Select employees for redundancy

You need to select employees for redundancy in a fair way. If you're making a whole team or specific group of employees redundant, you'll have already identified a clear criteria and list of roles you need to make redundant. For example, if a food shop closes its butchery, it will need to make its butchers redundant.

But if you need to reduce the number of employees in the organisation or team, you'll need to set up selection criteria and make a list of roles to be considered for redundancy (a 'selection pool').

2. Selection pools

Selection pools help make sure employees are selected for redundancy in a fair way. Where a number of different roles are at risk of redundancy, you may need to have more than one selection pool. You should include in each pool all roles that are the same or similar. You should also consider including roles that have similar skills. For example, if all sales roles are in a selection pool. You could also include roles from the telesales team if the skills are similar to those needed for the face-to-face sales team.

When setting up a selection pool, you should check and follow any:

• agreements you may have with a recognised trade union.
• existing redundancy policy

If there is no existing policy or agreement, you should consider consulting any recognised trade union on how the pool should be set up.

3. Using selection criteria

You should have included selection criteria in your consultation. Criteria should be as 'objective' and 'measurable' as possible. This means it should be fair, be based on facts that can be measured and not be affected by personal opinions. You must use the same way of scoring criteria for all employees in the pool.

Agreed selection criteria scoring is useful as:

• it can be applied to everyone (although you might need to use different scoring for different groups of employees – for example, the engineering team might have a different scoring from the sales team)
• it can be easily explained to everyone.
• employees feel they’re being treated fairly.
• it gives a clear, structured and consistent system for managing selection issues.
• it can be used at employment tribunals to defend an employer's decision.

Examples of selection criteria could include:

• standard of work or performance
• skills, qualifications or experience
• attendance record, which must be accurate and not include absences relating to disability, pregnancy or maternity
• disciplinary record

How to score employees - You can have different levels of points according to the importance of each criteria ('weighting') for your organisation’s needs. For example, if it's agreed that attendance record is less important than performance, you can allow fewer points for this. So you could score attendance out of 5 points and performance out of 10. You should have written evidence against each of the criteria.

Example scoring criteria and points.

You could measure employees work performance by attributing the following scores to their work. Companies often use their appraisal ratings to provide the evidence for this criteria:

• outstanding – consistently exceeds company standard - 15
• exceeds objectives of the role - 12
• meets all objectives of the role - 9
• meets some objectives of the role - 6
• fails to meet objectives of the role - 3

Skills and competence:

• fully competent, multi-skilled, supports others on regular basis - 15
• fully competent in current role - 12
• competent in most aspects of current role, requires some supervision - 9
• some competence in role, requires regular supervision and guidance - 6
• cannot function without close support or supervision - 3

Disciplinary record:

• no record of disciplinary action - 5
• record of informal disciplinary action - 4
• verbal warning current - 3
• written warning current - 2
• final written warning current - 1

Attendance record:

• no recorded absence - 5
• some absence but below average for selection pool (or workplace) - 4
• attendance in line with workplace (or selection pool) average - 3
• absence level above average for selection pool (or workplace) - 2
• high and unacceptable level of absence - 1

You need to avoid Discrimination at all costs when setting up your Criteria for redundancy selection. Therefore, you must not base your selection on any of the following criteria:

• age
• disability
• gender reassignment
• marriage and civil partnership
• pregnancy and maternity
• race
• religion or belief
• sex
• sexual orientation
• family related leave – for example parental, paternity or adoption leave
• their role as an employee or trade union representative
• membership of a trade union
• part-time or fixed-term employee status
• pay and working hours, for example because they’ve refused to give up rest breaks or asked for National Minimum Wage or holiday entitlements
• concerns they've raised about whistleblowing

Consultation Meetings - Once you have selected your employees who are at risk of redundancy you must have a clear set of individual consultation meetings throughout the consultation process.

Individual Consultation Meeting 1 - Book individual meetings with all those employees affected and who are at risk of redundancy to answer any of their questions, concerns etc. If they wish to apply for voluntary redundancy record this and if they have any viable suggestions to avoid compulsory redundancy discuss and record these.

Individual Consultation Meeting 2 - Meet with those employees that have been provisionally selected for redundancy individually. Explain that having applied objective selection criteria; you must now advise them that they have been provisionally selected for redundancy. Emphasise that this does not mean redundancy is a foregone conclusion. Explain you want to explore whether there are any other alternative options available in order to avoid the redundancy situation, such as alternative employment within the Company.

In this regard, share any options:

• other vacancies within the Company,
• an agreed reduction in working hours,
• an agreed reduction in salary.

Explain that you would now like to have a further consultation meeting with them to discuss the Company’s proposal and their provisional selection for redundancy before any final decisions is taken. Set the meeting date and explain they have the right to be accompanied at the consultation meetings. Their companion may be either a work colleague or a trade union official of their choice. Explain that their companion will be permitted to address the meeting and to confer with them during the meeting but they will not be permitted to answer questions on their behalf. Instruct them they should inform the chair of the meeting in advance of the identity of their chosen companion.

Final Individual Consultation Meeting - At this meeting explain that it is with regret that you must now inform them that their present role with the Company is redundant. This decision is due to the Company (experiencing a downturn in work in recent months/having carried out a reorganisation of its business and activities for essential economic reasons).

• Explain that you have fully considered whether other vacancies exist within the Company, but unfortunately, you are not at present in a position to offer any alternative posts.
• Explain the number of weeks/months’ notice of the termination of their employment and whether you expect them to work it or not. Confirm the date their employment terminates on the grounds of redundancy.
• Explain they will receive a statutory redundancy payment.
• Explain that during their notice period they are entitled to take a reasonable amount of paid time off work to look for alternative employment and attend job interviews.
• Explain they have the right to appeal against the Company’s decision to make them redundant if they are not satisfied with it. If they do wish to appeal they must do it in writing within five working days of receiving this decision. Explain that if they do appeal, they will be invited to attend a redundancy appeal meeting.

All of these consultation meetings should be followed up with a letter outlining the points from the consultation meeting and set out the next steps.