Redundancy - pools for selection
One of the most frequent problems experienced by employers who embark upon a redundancy programme is to establish a pool of employees from which employees should be selected for redundancy.
Selecting an appropriate pool size
If the employer fixes the pool too narrow an Employment Tribunal may find that is unreasonable and findings of unfair dismissal will follow. This happened in the case of Hendy Banks City Print Limited v Fairbrother, where a printing company selected only from a narrow pool of employees who worked on a particular piece of machinery, notwithstanding the fact the employees in question spent a significant amount of their time on other areas of work.
Pools for selection and multiple sites and locations
Another classic problem faced by employers is whether the pool for selection for redundancies should be restricted to one particular site or geographical location – typically where one site is being closed. Again consideration should be given as to whether employees at other sites should be considered in a pool for selection for redundancies. In the case of Highland Fish Farmers Limited v Thorburn, an employer decided to close one of its sites and made all of the employees at that site redundant without considering them in a pool for selection with employees at a site that was 40 minutes away. This was found to be unfair by an Employment Tribunal.
Inclusion or exclusion of management in the redundancy pool
Finally, it is not uncommon for employers to remove a level of management and only include the Manager or Managers in the pool for selection for redundancies. However, the risks of taking this approach were recently highlighted in the case of Fulcrum Pharma (Europe) v Bonassera. This case involved a decision by a firm to make its HR Manager redundant while retaining the HR Manager’s Junior Assistant. In that case the Employment Tribunal held that the employer should have given consideration to including both the Manager and her Junior in a pool for selection for redundancies. as a necessary first step the firm should have consulted with the Manager to see if she would be prepared to consider the more junior position at the lower salary before deciding whether both employees should be included in a pool for selection for redundancies.
In our experience the main problem encountered by employers in this area is a failure to give any or any significant consideration to establishing a pool for selection of redundancies in the first place. This crucial procedural aspect of the redundancy process is often overlooked by employers and needs to be considered very carefully if employers are to avoid findings of unfair dismissal.
This article was prepared by Alan Lewis who is an Employment Law Solicitor based in our Manchester Office but who also works from our Lytham Office. He is a Partner and Head of our Employment Law Department.