How should a business decide who is at risk of redundancy?

Guidance for Employers

How should a business decide who is at risk of redundancy?

Insights in how a business should select who is at risk of redundancy through the creation of a redundancy pool: the group of people from which the business decide who stays and who is made redundant.

How should a business decide who is at risk of redundancy?

5 November, 2020

by Lianne Lambert

This post provides insights in how a business should select who is at risk of redundancy. The correct process is the creation of a redundancy pool: the group of people from which the business is going to determine who stays and who leaves the organisation on the grounds of redundancy.

Getting pooling correct is a key element in determining whether or not a redundancy process is fair so it’s important that you get it right, or more accurately, it’s important that you have solid, documented reasons for why you select the pool(s) that you do.

This post is part of our redundancy series and it’s about a very specific topic.  If you’re looking for more general information about redundancy, then we’d suggest that you start with our Detailed Guide to Redundancy for Employers.  The guide gives you an overview of the entire redundancy process and the things that you should be thinking about in a redundancy situation.

The questions answered in this post are:

Pooling can be tricky so we strongly advise you get in-touch with us on 0203 319 1649 to get expert, tailored guidance before you take any actions.

1. How do I decide who is in the redundancy pool?

Many times, it is obvious who should be in the redundancy pool.

For example, you may have a team of designers who all do the same job.  You currently have 4 and you only need 2 moving forward.  In this situation, all 4 designers will be in the pool and you will go through a selection process as part of your redundancy consultation that will determine who is ultimately selected to leave your organisation.

But then there are the times when it’s not quite so clear.

You may have an organisation where there’s a lot of overlap between roles and, whilst people have different job titles, there are a lot of similarities between the jobs that they do on a day-to-day basis.  In this situation, how do you decide who you should be considering as part of the redundancy pool?

Our suggestion is that you start by making sure that you have job descriptions for the roles that you need moving forward.  Then, you should honestly ask yourself, based on what people are doing today, who is it that has the skills to do the roles in your future organisation?

Please note, don’t confuse this question with “Who do I want to be doing these roles in the future?”  You’re asking yourself who is currently doing a role that is very similar to the role that you need in the future.  These are the people that you should include in the redundancy pool.

2. What happens if I get redundancy pooling wrong?

Ultimately, getting redundancy pooling wrong could be a contributing factor to a finding of unfair dismissal in an Employment Tribunal but this typically only happens if you really didn’t give the topic much thought.

As we hinted at in the opening section, the most important thing is that you’re able to demonstrate that you gave due care and attention to determining who is in the redundancy pool and that you have business reasons for the approach that you have taken. 

It isn’t the job of the Employment Tribunal to decide whether you got redundancy pooling right or wrong; there are often many different ways that pooling could be conducted, and you know your business, the roles and the business need.  The job of the Employment Tribunal is to determine whether you gave redundancy pooling the appropriate consideration and have evidence to support why you decided to create the pool that you used.

3. Do I need to document the redundancy pool?

If you’ve read any of our other content on redundancy, you’ll know how we go on and on and on and on about the importance of documentation so here we go again! 

Documenting your thinking and decisions in a redundancy process is very important in order to put you in the best possible position if you do face future challenge on what you did.  Therefore, document the reasons for the redundancy pool you have selected.

4. Do I need to consult with anyone when defining the redundancy pool?

It’s worth remembering that redundancy pooling is something that you can and should consult on during the redundancy consultation process. 

Explaining to the impacted employees how you’ve reached the pools that you have and giving them the opportunity to challenge your decision gives you every opportunity to take a different approach if, in hindsight, you think that would be better. 

Of course, even if the employees challenge the pooling you don’t have to change your approach but you should demonstrate that you have taken the challenge into consideration and explain why you feel that your pooling is correct.

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