How to correctly identify a redundancy pool

Identifying and selecting the correct redundancy pool is one of the most challenging aspects of the redundancy procedure. Failing to consider a pool entirely or identifying the wrong pool may make the dismissal unfair and lead to an employment tribunal claim. Here, we look at how to correctly identify a redundancy pool.

What is a redundancy pool?

A redundancy pool is a group of employees who would be selected as being at risk of redundancy. There are no fixed rules about how the pool should be made up and there is no single right approach. However, employers are required to act reasonably and take care to avoid discrimination. If done correctly, redundancy pools help make sure employees are selected for redundancy in a fair way. Generally, a pool would be a group of employees who carry the same job role.

Factors to be considered

Organisations who have a redundancy procedure should ensure they comply with the procedure, usually, this is located in their staff handbook. If they do not, reference should be made to the ACAS guidance.

When determining a selection pool an organisation may make reference to several factors, including:

-Duties and responsibilities: Employees that undertake the same or similar roles may be included in the pool. The pool need not be limited to employees who undertake identical roles. For example, if an organisation is looking to make redundancies within its secretarial team, it may be unreasonable for it to exclude members of the administrative team who do similar/the same work as the secretarial team.

-Organisation structure: If employers are considering making redundancies within a particular team, they should look at the business as a whole and consider whether there are employees who undertake similar/the same work even if they work in a different part of the business or different shift unless there is a good reason to excuse them.

-Location: employers may consider employees who work at a different location but carry out the same or similar roles as the individuals who are at risk of redundancy when they are considering their redundancy pool.

-Interchangeable skills: If an employee has previously worked in other roles at the organisation, it is likely that their skills are interchangeable with other employees and so a wider pool may be required.

-Associated Employers: 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. Therefore, it may be appropriate to include employees working in associated companies who carry out the same or similar roles.

If the organisation recognises a union, it is expected that the choice of pool will be discussed with the union.

The size of the redundancy pool

Usually, employers like to keep the redundancy pool narrow, the wider the pool the more onerous the process shall be on the employer as there shall be more individuals to consult with. However, employees tend to prefer wider pools as this reduces their risk of being made redundant.

Employers who want to formulate a narrow pool which contains solely of those provisionally selective for redundancy should bear in mind the litigation risk associated with this as they are effectively by passing the pool stage.

How we can assist

Our team of expert employment solicitors can assist you in ensuring that you select the correct redundancy pool and therefore reducing the risk of an unfair dismissal employment tribunal claim. To speak to a member of our team, please call 02079036888 or email us at contact@davenportsolicitors.com.