Depending on the reason for the redundancies, it may be clear that all employees doing a particular job or working in a particular location need to be made redundant. In other cases, however, the company may need to identify the section of the workforce from which the redundancies are to be made, sometimes referred to as the 'redundancy selection pool', and then choose individuals from within that pool for dismissal. The pool is one of the issues that should be covered in the consultations an employer has with employee representatives.
Under unfair dismissal law, an employer has a large degree of discretion in how it defines the pool, provided it acts reasonably and there is a clear business rationale for the pool it chooses. Unfair dismissal claims are most likely to arise if the pool is drawn too narrowly. Take, for example, a company that needs to contain or reduce the labour costs for Department A. It decides that this can best be achieved by shedding administrative staff. It has employees doing similar types of administrative work in Department A and in Department B. It may be reasonable for the company to include administrative staff in both departments in the selection pool, rather than limit the pool to Department A alone. This is particularly true where Department A has employees with substantially more service than those in Department B. Your Association can provide advice on identifying an appropriate selection pool.
It is also important to avoid defining the redundancy selection pool in a way that involves indirect discrimination. Indirect discrimination is discussed elsewhere in this Guide (indirect discrimination). In summary, it makes it unlawful for employers to adopt practices that work to the particular disadvantage of people of a particular race, sex, age, religion or sexual orientation unless they can show a clear business need for the practice. For example, if a company decided to make redundancies from among staff on temporary contracts only, and a larger proportion of its temporary employees than its permanent employees were women, it would need to consider whether it was justified in limiting the pool in that way. Limiting the redundancy selection pool to fixed-term employees only would also be in breach of the Regulations on fixed-term work, unless the use of that pool could be objectively justified (equal treatment principle ). Companies can obtain advice on the issue of justification from their Association.