There needs to be a clearly defined group of employees from whom those to be made redundant will be selected. This is what lawyers call a selection pool.
Sometimes, the pool will be obvious. For example:
- if an entire workforce or an entire building is closing down, the pool might be that workforce or the people who work in that building
- in a small company, if there are two secretaries and one is to be made redundant, the pool might consist of those two secretaries.
However, it gets more complicated when the employees are being made redundant from roles that cross over departments, projects or locations. Your employer will need to show that it has acted reasonably in deciding who is included in the pool.
The pool of one?
When there is a very specific role disappearing and there is only one employee who does that role, then the selection pool may only consist of one person.
The same principle may apply in any case where the number of roles disappearing is the same as the total number of people doing that role.
The advantage of a pool of one is that it removes the need for a selection process.
However, employers must take care to avoid the accusation that they have created the redundancy situation as a device in order to engineer the dismissal of a particular employee.
If you feel that your employer has engineered your dismissal in that way, you may be able to claim unfair dismissal.
Narrow or wider pool?
You may be able to argue that your employer is acting unfairly if you can point to other staff who you think should have been included in the selection pool.
How your employer should choose a selection pool
Your employer should take two steps when considering the selection pool.
Firstly, they should look at the area of the business that’s changing.
That may be the geographical area (eg the warehouse in Coventry) or the job function (eg people working on the vehicle production line).
Secondly, they need to consider whether to widen the pool beyond the people identified in the first step.
For example, it may need to be widened to include other employees who do similar work and/or have interchangeable skills.
Consultation over the pool
As part of the consultation exercise, your employer should consult with employees about which categories of staff to to include in the selection pool.
Your employer has to listen to what employees say, although they don’t have to agree.
What happens if your employer doesn’t follow these steps?
If your employer doesn’t follow the correct steps when identifying a selection pool, you may be able to claim compensation for unfair dismissal.
However, it’s usually better to negotiate a settlement agreement if you can. There are a number of reasons why a settlement agreement may be preferable to an employment tribunal claim.
Sometimes your employer may offer you settlement agreement before going through the redundancy procedure. This could potentially benefit both you and your employer. If you accept it, you will probably get more money than if you were made redundant. In exchange, your employer avoids the challenges of having to identify a selection pool. You will need to weigh up the pros and cons before deciding whether to accept a settlement agreement instead of going through a redundancy procedure.
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