As of August 1st, the support available to employers through the Coronavirus Job Retention (furlough) Scheme gradually starts to taper off. For some employers, the economic situation looks sufficiently positive to start preparing for a return to work but, for others, the time when they must seriously consider redundancies is near at hand. When a whole workplace is closing, the redundancy selection process is sadly all too straightforward. But when the employer is faced with the task of selecting individuals for redundancy from a pool of ‘at risk’ employees, it is essential for the employer to follow a fair, transparent and consistent procedure when deciding whom to select from that pool. A redundancy selection criteria matrix can help employers reach that decision, but how can they best ensure it is as fair as possible?
Businesses and workplaces vary greatly and so it is difficult to produce a generic redundancy selection criteria matrix that will work for everyone, but here are some key points to bear in mind:
1. Choose redundancy selection criteria that are as objective and measurable as possible. ACAS advises that employers “should base the criteria on:
- standard of work;
- skills, qualifications or experience; and
- attendance record, which must be accurate and not include absences relating to disability, pregnancy and maternity."
This list is not exhaustive but, in choosing additional selection criteria, employers should ensure that these are relevant and appropriate in the circumstances.
2. Avoid any selection criteria grounds that will be automatically unfair from an employment law point of view. Automatically unfair reasons for redundancy selection include:
- an employee's trade union membership or activities;
- health and safety activities;
- pregnancy and maternity leave; and
- making a protected disclosure (whistleblowing).
Similarly, employers must be careful to avoid any criteria that place an individual at a disadvantage because of sex, race, disability, age, religion or belief, sexual orientation, marital or civil partnership status, pregnancy or maternity or gender.
3. Make sure scoring is carried out by managers (ideally more than one) with direct knowledge of the employee’s work. Keep written records of the process and evidence for decisions e.g. performance reviews and attendance records.
4. Employers should be careful of using selection criteria like ‘attitude’ and ‘flexibility’ that are hard to quantify and therefore more likely to be subjective.
5. ‘Performance’ or ‘standard of work’ are reasonable redundancy selection criteria to use but any assessment should be supported by clear, objective data. In a sales or manufacturing setting, performance is likely to be relatively easy to measure but in, say, a business in the service sector this may be more problematic. Performance reviews or appraisals are helpful here but only if they are recent and everyone in the redundancy selection ‘pool’ has actually had an appraisal.
6. Avoid ‘Last In, First Out’ (LIFO) as a means of selecting ‘at risk’ employees for redundancy. Under LIFO, employees are selected for redundancy in the order in which they joined a company, with the most recent joiners being dismissed first. This is an objective criterion but may be discriminatory because the most recently employed are generally also the youngest. If only young people are selected for redundancy, this would lay the employer open to a claim for age discrimination.
Aside from the risk of discrimination claims, the employees with the longest service are not necessarily best or most skilled employees.
7. Do not use the fact that an employee has been placed on furlough leave as a reason to select them for redundancy.
8. Ensure employees in the ‘at risk’ group are provided with their score and sufficient information to discuss and challenge a rating under the redundancy selection matrix. Please also view the full list of Redundancy Documents to help you manage the redundancy process.
Simply-docs have a range of documents to guide employers through the redundancy process. A template redundancy selection matrix has been added to the portfolio of documents, that should be adapted to the employer’s specific needs and circumstances.
The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.