SELECTION PROCESS FOR REDUNDANCY : A GUIDE FOR EMPLOYERS DURING COVID- 19

While the Coronavirus Job Retention Scheme has provided great support to businesses, with the ability to reclaim 80% of their employees' wages from HMRC, employers still struggle to make ends meet, as financial complications continue.

REDUNDANCY CLAIMS

Redundancies will allow employers to reduce financial pressures during such unprecedented times. Despite the distressing impact this will have on employees, this is a well-founded concept that will enable you, the employer, to continue business operations over the coming months.

S.139 Employment Rights Act 1996 ("ERA") states dismissal by reason of redundancy will arise when the requirement of an employee's work has or is expected to cease or diminish or the employer has or intends to close down the business or the employee's workplace.

Principally, redundancy is a fair reason for a dismissal (s.94 ERA), however the dismissal procedure must not be unfair. Extra care should be taken during the selection process, to prevent unfair measures.

SELECTION PROCESS

REDUNDANCY POOL

The initial step is to fairly identify a redundancy pool within the company. This entails selecting a reasonable pool of employees. When identifying a pool, you may consider:

.Whether employee jobs are interchangeable;

.Geographical locations of employees; or

.The roles that are ceasing/diminishing, which is a likelihood in light of Covid-19.

As there is no fixed rule on how a pool should be defined, as clarified in Thomas & Betts Manufacturing Ltd v Harding [1980] IRLR 225 (CA), employers must demonstrate they have genuinely and reasonably applied their mind to the issue. If this element is correctly satisfied, an employee may find difficulty challenging the pool.

A failure to select fairly may give rise to unfair dismissal claims, as was the case in Taymech Ltd v Ryan [1994] EAT/663/94. Taymech was dismissed on the ground that she was the only telephonist. However, it was held that a meaningful comparison should have been made between the work she carried out and work other employees carried out within the company, as their jobs were interchangeable and thus they could have been placed within the same pool.

As employers hold a degree of flexibility in defining a pool, it is advisable a pool is not too widely or narrowly defined. A narrow pool will make you vulnerable to unfair dismissal claims, whilst a too wide pool will entail significant commercial risks.

SELECTION CRITERIA

The ACAS requirements provide helpful redundancy guidelines for establishing selection criteria. They recommend employers act objectively, with consistency and fairness. A useful method is a scoring matrix, where you can identify different criteria which you can score individual employees against. This may be based, for example, on:

.Skills, qualifications and expertise;

.Standard of work and/or performance;

.Disciplinary records; or

.Employee attendance.

A selection criterion lacking objectivity and solely based on opinion is likely to render a dismissal unfair. In Williams and others v Compair Maxam Ltd [1982] IRLR 83, it was held that the criterion based on retaining employees who would keep the company viable was entirely subjective.

As with pools, failure to adopt fair selection criteria will give rise to unfair dismissal. Should the employment tribunal find an unfair dismissal, you may be ordered to reinstate the employees to their old job or provide them with a new job within the company.

WHAT ARE THE IMPLICATIONS OF COVID-19?

In the current climate, it is advisable that employers do not select employees shielding because of Covid-19. The undesirable nature of the pandemic poses significant risks on those with protective characteristics such as age and disability.

It is advisable to be mindful of the potential discrimination claims that may arise as a result of dismissal based on a protected characteristic. Therefore, it may be helpful to take precautions as set out below.

PREVENTATIVE MEASURES:

1.Government guidelines suggest employees aged 70 and over should shield due to current events. Therefore, avoid measures that will require physical attendance of all employees during Covid-19, as this may amount to age discrimination. Likewise, offering early retirement or voluntary redundancy only to employees 70 and over may have a similar result;

2.Be wary of employees with disabilities as defined under s.6(1) Equality Act 2010 ("EqA") and make adjustments accordingly. This may include offering flexible working, alternative employment or temporary lay-offs. A failure to do so may result in a claim for breaching duty to make reasonable adjustments when a disabled person has a substantial disadvantage (s.20 EqA);

3.Seek medical advice from a qualified medical practitioner on the suitability of employees returning to work during Covid-19 and whether any adjustments should be made for vulnerable employees.