Who should be in a redundancy selection pool?
If you are in a unique role, there is no requirement for a selection pool. Similarly, there is no requirement for a selection pool if your employer closes its whole business (although there may be a requirement for a pool where an employer closes just one of its sites).
An employer otherwise does have a degree of flexibility when deciding on the redundancy pool, however it must act reasonably. In fact tribunals are entitled to scrutinise carefully the reasoning of an employer to determine if it has “genuinely applied its mind to the issue of who should be in the redundancy selection pool”. Assuming an employer has so genuinely applied its mind, it will be difficult, but not impossible, for an employee to challenge its decision. For example, a pool of one employee has been held to be unfair where there were other employees doing the same role.
The following factors are considered reasonable (and in some cases expected),when an employer is determining a selection pool:
- Employees should undertake the same or similar roles. The roles carried out by the employees in the pool do not, however, have to be identical. Employees carrying out similar roles should only be excluded if there is good reason to do so. For example, an employer that is making redundancies from its secretarial staff may act unreasonably by excluding other administrative staff from the selection pool where the duties of those job roles are similar or overlap.
- Employees should be included where they undertake the same or similar roles in different parts of the business or on different shifts, unless there is good reason to excuse them.
- Consideration should be given to whether or not there are employees who undertake the same or similar roles at other sites. Even where a business site closes down, it does not mean that only the employees who worked at that site should be included in the pool. If there are other sites in close proximity and an employee is either contractually bound or willing to voluntarily work at the other sites, then employees from both sites should be included unless there is good reason not to do so.
- Is the work that employees are carrying out interchangeable? The pool does not need to be limited to employees doing the same or similar work. If an employee can easily carry out the duties of a different role (or perhaps has done so in the past),then the selection pool could be held to be too restricted if it does not include those interchangeable roles.
- A selection pool may have to include those who are working for “Associated Employers”.
Section 139(2) of the Employment Rights Act 1996 states that the business of the employer together with the business or businesses of associated employers shall be treated as one for the purposes of determining whether or not a redundancy situation exists. Two employers are associated where one company is controlled by the other (whether another company or an individual) or if both companies are controlled by a third party (s.231 of the Employment Rights Act 1996).
Accordingly, the pool for selection should not necessarily be limited to the employees of the company where there is the need for redundancy, but also to include employees working in associated companies who carry out the same or similar role.