Choosing your selection pool

You know you may need to make one or more employees redundant, but what happens next? How do you decide which employees should be considered?

The first step is to create a clearly defined group — or ‘pool’ — of employees from which you will make your choice using selection criteria. This can include what is known as a ‘pool of one’.

Sometimes the ‘pool’ will be obvious: if an entire workplace is closing down, the pool might be everyone who works in that building. Or, in a small company, if two secretaries are to be made redundant, the pool may comprise both secretaries. But it can get trickier when people are being made redundant from roles that span departments, projects, or locations.

How wide or narrow the pool should be is a matter for each employer to decide, but it is something that needs both careful consideration and clear proof that thought has gone into it.

The pool of one

A pool of one has the advantage of removing the need for a selection process, but you need to be careful as the employee might argue that the redundancy situation has been created simply to engineer their dismissal.

Sometimes managing a pool of one is straightforward — for example, where there’s a really specific role that is disappearing and just one employee who does it (Halpin v Sandpiper Books Ltd (EAT/0171/11)).

The phrase ‘pool of one’ can also cover the situation where the selection pool is the same size as the number of people being made redundant. If an employer is making six roles redundant and uses a ‘pool of six’, it’s effectively a fait accompli with no selection taking place.

However, tribunals can sometimes conclude a ‘pool of one’ is a device to target someone. There are a number of cases where the tribunal doesn’t necessarily say it was used as a ploy, but it’s clear that is what they were thinking. If it’s not crystal clear that the employee is genuinely a standalone employee, it’s always safer to use a wider pool.

The counter-argument is that using a wider pool is unsettling for other employees drawn into it, especially if you know they’re going to score well and won’t be selected for redundancy. And that’s a valid commercial consideration, as long as you understand you’re increasing the chances of a tribunal finding the dismissal unfair.

Should you use a narrow or a wide pool?

You tend not to find cases where employees have criticised a pool for being ‘too large’ — it’s more common for them to complain that they have been unfairly dismissed because the pool was too narrow and did not include others who ought to have been involved.

But using too large a pool can also create problems. There’s the risk of destabilising the workforce once you start consulting with a larger group of people over potential redundancies. You’ll also want to keep your best employees, and sometimes they are going to be the very people most attractive to other employers. So they might volunteer for redundancy or leave for a more secure job.

You therefore need to walk something of a tightrope between protecting yourself legally against arguments that your pool was too small, and protecting morale and industrial relations by having the pool too wide.

The modern approach is set out in Foley v Post Office [2000] IRLR 827, which says the ‘range of reasonable approaches’ test applies to the selection pool, as it does to most aspects of unfair dismissal law. So as long as your selection pool resembles one that a ‘reasonable employer’ might properly choose, theoretically you’ll be fine.

The two rules for choosing your pool

How do you choose a pool which is unlikely to criticised by a tribunal?

First look at the area of work where you’re losing employees. It could be geographical, or it could be a type of work. In many cases, that’s likely to be good enough. It’s simple, it’s fair, it’s straightforward. But if you make sure you also document your thought process — in emails to colleagues, say, or by using a log — you’re going to have to be very, very unlucky to have a tribunal say your pool is unreasonable. Yes, it’s cumbersome, but tribunals love contemporaneous records.

Also consider whether you need to widen that pool beyond the people you first identified, by including other employees who normally do the same or similar work, and who have interchangeable skills.

Sometimes it’s the employees who say that they think you should be using a wider pool. That’s not surprising, because the wider the pool, the lower the chances of any individual being selected for redundancy. But if you don’t want to widen the pool, you need to ensure you can rationally defend the business case for your decision — and if you’ve followed the steps above, you’ll be able to do that.

You’ll find much more about managing pools in Module 4, while in Module 5 I explore the criteria you’ll need to use when you’re ready to make your selections.

Meanwhile, here are three top selection pool tips...

1. Decide how to define the pool — is it everyone from one location, for example, or doing one kind of work, or can you broaden it out?

2. Remember a ‘pool of one’ is fine as long as you can justify that decision

3. Track and log the entire process so you have a record of your thought processes should you face an employment tribunal claim.