It is very easy for employers to fall foul of the procedural requirements for a fair redundancy dismissal and selecting employees unfairly is one of the most common mistakes. Where it is necessary to select employees for redundancy, it is crucial that an employer does this fairly as failure to do so will enable employees to bring a claim of unfair dismissal (assuming they have been employed for at last two years).
Have I been fairly selected for redundancy?
It will usually be necessary for employees to be selected for redundancy (unless the entire company, division or team is being dismissed). The first step involves selecting the correct pool from which those who are to be made redundant will be selected. Generally, a bigger pool will be fairer for individuals. The second step involves setting fair selection criteria against which those in the pool will be scored. The final step involves assessing those in the pool against the criteria, scoring them and deciding those who will be selected.
What do fair selection criteria look like?
Selection criteria should be fair. This means they must be free from the taint of discrimination of any kind such as sex, race, age or disability. Criteria may not be obviously discriminatory but may be indirectly so. For example, if sickness absence is a criterion then any absence for a pregnancy related reason should be disregarded. Disability related absence may also need to be disregarded to some extent and a “first in, last out” selection method is likely to be discriminatory on the grounds of age.
Criteria should be related to measurable, objective factors rather than based on subjective concepts such as “enthusiasm” or “attitude”. Scores should ideally be moderated by more than one manager and it should be possible to challenge any obvious mistakes in scoring.
What does a fair procedure for redundancy look like?
The selection process is an important part of the overall procedure but, there are other ways in which employers can get this wrong. If an employer behaves unfairly at any step of the procedure then an individual will have a claim for unfair dismissal.
There is no specific legal procedure but ACAS does give best practice guidelines which employers are advised to follow. No two situations will be exactly the same but, very broadly, the ingredients of a fair procedure will include an employer:
- giving due consideration to ways to avoid the redundancies such as reducing overtime, laying off temporarily, agreeing new terms and conditions, offering voluntary redundancy,
- giving staff as much notice as possible of proposed redundancies and not rushing through the process unduly quickly,
- consulting meaningfully with staff, including giving proper thought to any proposals they put forward. This is likely to involve at least two private meetings with each of those affected,
- explaining the selection criteria and scoring to allow staff to appeal against their selection for redundancy,
- considering whether there are any suitable alternative roles which could be offered in other parts of the business (including at other group companies), and continuing to do so up until the date of dismissal.
Does my employer have to consult collectively about my redundancy?
Employers only have to consult collectively (i.e. with employee representatives such as trade union officials), that is with employee representatives, in the event of proposals to dismiss 20 or more employees. If less than 20 employees are at risk of redundancy, in any three month period, then only individual consultation is necessary.