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Selecting people for redundancy is a complicated area which is the focus of many successful unfair dismissal claims. This article outlines the key types of selection criteria and identifies best practice in choosing and applying them fairly in a redundancy situation.
When considering redundancies, it is important for organizations to be aware of the distinction between ‘posts’ and ‘people’. Jobs, and not individuals, are made redundant. Once it is clear that an organization needs to make compulsory redundancies, the issue of how to go about selecting posts becomes a priority.
Posts should be selected from an established redundancy ‘pool’, which contains all the employees whose particular work will cease or reduce. All organizations, regardless of their size, must demonstrate that they have used an appropriate means of selecting people for redundancy from the pool. If the employer’s approach to determining or applying its selection criteria is poorly thought out or carelessly applied, the employee may have a case for unfair dismissal.
A Note About Fairness and Objectivity
Selection criteria should be applied in a fair and consistent manner so that all employees are selected by the same process of assessment. Selection should not be reliant on the subjective judgments and personal opinions of individual managers or HR practitioners. Careful attention should be given to developing criteria that can be independently applied, in order to maximize objectivity.
Types of Selection Criteria
A number of broad areas are recognized as a suitable basis for making redundancy selection decisions. The types of selection criteria used will vary between organizations depending on the redundancy situation and the future needs of the business.
Employee representative groups or trade unions should be consulted on the proposed selection criteria and their agreement sought on the final arrangements. Employers should also be aware that not all criteria will apply to every redundancy situation, and some might only seldom apply. Selection criteria can be categorized as follows:
1. Length of Service
‘Last in first out’ (LIFO) selects individuals with the least amount of service in the organization. LIFO’s popularity is based on its simplicity, ease of use and resistance to management bias. It can also reduce costs as redundancy payments are based on length of continuous service.
However, LIFO is not without its legal and operational problems. Firstly, it is potentially discriminatory against various groups, e.g. the continuous service of women can be less than that of men due to periods of maternity leave. Secondly, LIFO can result in a distorted age profile within the organization, creating an aged workforce with fewer younger employees. Thirdly, LIFO can remove the talent base of an organization through the loss of highly skilled newer recruits.
It is therefore recognized that LIFO should no longer be used as the sole reason for redundancy selection and must be well balanced against other criteria. By using a combination of selection factors, employers can reduce the potential discriminatory effects of a single element such as LIFO. They can create a selection tool which best reflects and meets the future requirements of the business.
2. Skills and Experience
It is important to identify the necessary skills and experience that will be needed in the organization following the redundancy program. Retention of skilled employees will help to ensure that the organization remains competitive in the future.
Particular technical capabilities or specialist knowledge may be important, as well as depth of organizational knowledge, team working capabilities or possession of specific qualifications.[1] When considering a range of skills and experience, it is useful to develop a weighted system of the chosen competencies, against which the pool of individuals can be formally assessed.
3. Standard of Work Performance
Work quality and the standard of work performance often form a key element of selection for redundancy. However, for this method to be objectively applied there must be concrete evidence to support the decision-making. This might take the form of various performance measures such as productivity, time keeping, attendance records, work efficiency and meeting agreed objectives through appraisal.
If performance is used as part of the selection framework, assessments should be carried out consistently for all employees, and not introduced just prior to the redundancy program. Performance criteria also need to be clearly defined and understood. Using performance as a selection method can help foster the development of a ‘performance culture’ where increased job security is linked to high performance working.
4. Attendance and Disciplinary Records
Levels of attendance and disciplinary records can also be included in the selection process. Before adopting these criteria, an employer should consider a number of issues. Particularly with sickness absence, the duration and reason(s) for the absence should be taken into account. Care should be taken as to whether ‘one-off’ illnesses or long-term absences are to be included, and employers should not discriminate on the grounds of disability or work-related absence. The employer should consider the frequency of absence, and whether a pattern of absence persists over a period of time. A further key issue is whether the reasons for the absence are linked, or completely unrelated.
The use of disciplinary records to aid the selection process should follow a consistently applied approach, and avoid managerial opinions or bias. Points can be allocated according to the incidence and level of disciplinary action or absence type, with a score being allocated to each employee in the pool.
Documentary evidence to support the selection process is crucial. Clearly, it would be difficult to use performance, absenteeism or discipline as a basis for redundancy, unless there is clear, documented evidence available to support the decision-making.
5. Flexibility and Adaptability
An individual’s versatility and adaptability can be included as a supplementary redundancy selection measure, but only where this is relevant to the organization’s needs. It is unlikely that flexibility or adaptability will constitute the most important selection criterion, but if using this measure, organizations should consider whether an individual can, or has in the past demonstrated versatility in adapting to change and undertaking different duties.
However, care must be exercised to ensure that the application of these criteria does not result in discrimination against particular groups. For example, it may be more difficult for women to demonstrate flexibility, as they tend to be primary carers. This area is less easy to assess objectively, so thought should be given to how the criterion is developed, and if these factors are essential to the needs of the organization.
Application of Selection Criteria
The consistent application of the chosen selection criteria is important, as careless or ill thought out use can quickly render the process unfair. Once the criteria have been identified and used to create a redundancy selection matrix, a points scoring system can be developed.
Specific criteria can be given additional ‘weighting’ depending on their relative importance to the organization. For example, where customer service is viewed as a key competency, the points awarded could be weighted as twice or three times as important as the other factors in the matrix.
Each employee within the pool should be assessed against the full range of criteria. The point scoring process must be applied consistently to all employees within the pool. Employers should be able to demonstrate that there has been comparative analysis of evidence relating to all staff in the pool. A clear justification should be provided for each decision based on reference to accurate documentation and employee records.
The individuals in the pool should be ‘ranked’ against the matrix of agreed factors, to determine the order of those most at risk of being made redundant. The employees with the lowest scores following the assessment will be provisionally selected for redundancy.
Best Practice
To ensure fairness to all employees who are potentially at risk of redundancy, the following principles to selection methods and their application should apply:
- Use a range of selection criteria
- Consider future needs of the organization
- Avoid discriminatory outcomes
- Seek agreement with employee representatives
- Apply criteria fairly and objectively
- Make reference to accurate documentation and employee records
Conclusion
Selecting individuals for redundancy remains a difficult and emotive issue. However, organizations that carefully select their redundancy criteria and apply them fairly and objectively will be afforded much greater protection from unfair dismissal claims.
References[1] Generally, specific qualifications should only be considered where they are relevant to the type of work undertaken and the needs of the business.
