Getting your redundancy selection criteria right

Many tribunal cases relate to how employees are selected for redundancy. Nicola Clarke explains how businesses can make fair decisions

Employers must consider a number of issues if they are to carry out a fair and transparent redundancy process. One of these is the selection criteria used to score employees and decide which are redundant.

Unfairly devised or applied selection criteria can result in various employment claims, including unfair dismissal and discrimination. Selection is one of the main areas that employees challenge when made redundant.

Employment tribunals should not substitute their views for those of employers, and this applies to selection criteria. However, although it is less common to question the particular criteria chosen, tribunals are more likely to have a view on how scoring has been applied.

It is, therefore, vital for employers to be clear about what criteria they will measure against and how employees will be scored.

Judgement call

One misconception is that, to be fair, selection criteria must always be objective. That is not the case. 

Objective criteria, such as disciplinary record, skills and experience, are generally preferable because they are easier to measure. However, there is more acknowledgement that employers might need to exercise personal judgement to make decisions.

Subjective criteria, such as employees’ attitude and flexibility, have historically been deemed areas to avoid. However, subjective criteria like these can be applied if caution is exercised.

Where selection criteria are difficult to measure, justify and are open to interpretation, employers should ensure they are clear about what the criteria consist of and how scores will be applied to them.

For example, if employers score ‘attitude’ they should clearly explain what aspects of an employee’s attitude will be measured, particularly because this is likely to be viewed differently by different people, and ensure they provide evidence to support their scoring. Ultimately, the clearer an employer can be, whether criteria are objective or subjective, the less chance there is of employees successfully challenging this at tribunal.

Absence of proof

The application of absence-related criteria is a key problem area when scoring in a redundancy exercise. Although it is acceptable to consider absence records when scoring employees, there are some important considerations and risk areas, such as whether the employee is disabled and what adjustments need to be made to scoring.

Failure to be alert to this can result in discriminatory selection criteria being applied. Employers need to be aware that any maternity or family absence must be ignored, while reasonable adjustments to scoring, ie, discounting absence, will need to be made for disabled employees.

If employers score sickness absence, then it is advisable to apply a long enough period over which the absence can reasonably be measured so that a complete picture can be gained, particularly where longer-serving employees with historically good absence records are involved, and take into account any adjustments. 

Accidental ageism

What about selection based on costs to the business? In theory, employers can dismiss their most expensive employees. However, this is not without issues and it should not be applied in isolation.

This often results in employers losing highly skilled workers or dismissing those with lower redundancy payments. The latter are likely to have shorter lengths of service so may be a form of the traditional ‘last in first out’ approach, which should not be used.

There are also risks of this resulting in age discrimination claims because it tends to be the case that the most expensive workers are older.

There is a lot to consider when choosing and applying selection criteria and it is a part of the redundancy process that is often scrutinised in the tribunal. However, as long as employers have acted reasonably, with a clear understanding of what they are scoring and how, they will be in a stronger position to defend against any challenge.

Nicola Clarke is a senior associate in the employment practice at Glaisyers