What Is a Redundancy Selection Pool and How Should Employers Choose One?

When an employer needs to reduce the number of employees but does not want to remove an entire role or department, one of the first questions is often: who should be considered for redundancy? This is where a redundancy selection pool comes in. A selection pool is the group of employees from which the employer will select those who may ultimately be made redundant. Getting the pool right is an important part of a fair redundancy selection process. If the pool is too narrow, too wide or designed around a particular employee, the employer may face allegations that the selection was predetermined or unfair. There is no single statutory formula for deciding exactly who must be placed in a redundancy pool. The appropriate approach will depend on the circumstances, including the roles affected, the proposed organisational changes and the skills the business needs going forward. For employers planning redundancies, therefore, choosing the pool is not simply an administrative step. It is part of the legal process and should be capable of being explained and justified. What is a redundancy selection pool? A redundancy selection pool is a group of employees who are placed together because their roles are sufficiently similar for the employer to decide which employee or employees should be selected for redundancy. For example, suppose a company employs ten sales executives but only needs six going forward. The business may create a selection pool containing all ten sales executives and then apply fair selection criteria to determine which four employees are selected. The situation can be different if an employer is removing an entire role that only one person performs. If that employee’s job genuinely disappears and there is no need to choose between comparable employees, a wider selection pool may not be necessary. The important distinction is whether the employer is removing a particular job or reducing the number of people needed to perform a type of work. Why does the redundancy pool matter? The selection pool determines who is competing for the remaining roles. That makes it potentially one of the most important decisions in the entire redundancy process. Imagine a business has five employees carrying out broadly similar administrative work but decides to place only one particular employee in the redundancy pool because management believes that employee is the weakest performer. If the other four employees could reasonably have been included, the employer may have difficulty demonstrating that the selection process was fair. This does not mean an employer must always include every employee who performs work that is remotely similar. There can be legitimate reasons for defining a pool more narrowly. The employer should, however, have a rational and defensible reason for the approach taken. If you are planning a redundancy exercise and are unsure how the pool should be structured, KLG Law’s redundancy advice for employers can help you assess the proposed selection process before decisions are made. How should an employer choose a redundancy selection pool? There is no universal redundancy pool that will work for every organisation. The starting point should be the proposed business change. An employer should ask what work will be required after the restructure and which employees currently carry out that work. Start with the roles affected by the proposed change The employer should first identify why redundancies are being considered. For example, the business may need fewer employees because: A department is being reduced A particular function is being outsourced The business is closing a location Several employees perform similar roles but fewer positions are now required Technology has reduced the amount of work required The organisation is restructuring its teams The proposed future structure should then be considered. It is much easier to justify a selection pool when the employer can explain how the pool relates to the actual organisational change. Consider employees doing the same or similar work Where several employees perform the same job, they will commonly form the redundancy pool. However, job titles are not necessarily decisive. Two employees might have different job titles but carry out substantially similar work. Conversely, two people with the same job title might have materially different responsibilities. Acas recommends considering roles that are the same or similar and says employers should also consider roles involving similar skills. This means employers should look at the substance of the roles, not simply the wording on employment contracts or organisational charts. Consider transferable skills The employer should also think about whether employees outside the immediate department have skills that could reasonably place them within the pool. For example, suppose a company is reducing its marketing team but several employees in communications have very similar skills and responsibilities. It may be appropriate to consider whether those roles should form part of the same pool. There is no requirement to create an enormous pool containing every employee whose skills have some possible connection to the affected role. The question is whether there is a reasonable basis for treating the employees as part of the same selection exercise. Redundancy selection pool examples The following examples show how the approach might work in practice. Example 1: Ten employees doing the same job A business has ten customer service advisers but only needs eight after restructuring. A reasonable approach may be to place all ten advisers into one selection pool and use objective selection criteria to identify the two employees at greatest risk. Example 2: One role is genuinely disappearing A company employs one payroll manager and decides to outsource its entire payroll function. If the payroll manager’s role genuinely disappears as a result, there may be no need to place unrelated finance employees into a wider pool simply to create a selection exercise. The employer would still need to follow a fair redundancy process, including appropriate consultation. Example 3: Similar roles across departments A business has three communications officers and two marketing officers. Following a restructure, it needs fewer employees performing communications and marketing work. The employer should consider whether the roles have sufficiently similar duties and skills to justify one wider pool, rather than automatically creating separate pools based only on job titles. Example 4: A pool of one A pool of one can be lawful in the right circumstances, particularly where an individual role is genuinely unique or is specifically disappearing. However, an employer should be cautious about using a pool of one simply because it wants a particular employee to leave. The real question is whether the employer can objectively explain why that employee’s role is the appropriate one to place at risk. Can an employer choose a pool of one? Yes, potentially. There is no general rule that every redundancy selection pool must contain two or more employees. A pool of one may be appropriate where the employee occupies a genuinely unique role that is being removed. The risk arises where the employer uses a pool of one to avoid comparing the employee with others who could reasonably have been included. For example, if five employees perform substantially similar work but the employer chooses one person for a pool of one without a convincing business reason, the selection process may be vulnerable to challenge. The employer should therefore be able to explain: Why was this employee’s role selected for redundancy rather than the roles of other employees doing comparable work? That explanation should be based on the proposed business structure and not personal preference. Should employees be consulted about the redundancy pool? Yes. The redundancy pool and selection criteria can form part of the consultation process. Consultation should be genuine and meaningful. Employees should have a reasonable opportunity to question the proposed pool, raise concerns and suggest alternatives before the final decision is made. Acas states that employers should consult employees about the selection criteria and the proposed redundancy arrangements. An employee might, for example, point out that another department carries out substantially similar work or that the proposed pool excludes employees with comparable skills. The employer does not have to accept every suggestion. It should, however, properly consider what is raised. This is one reason why redundancy consultation should not be treated as a meeting held simply to announce a decision that has already been made. You can also read KLG Law’s guide on the redundancy consultation period and what employers often get wrong for more detail on this stage of the process. How does the redundancy selection process work after the pool is chosen? Once the pool has been established, the employer normally needs to apply fair and objective selection criteria. The criteria should relate to the business’s future requirements and should be capable of being applied consistently across the pool. Common criteria can include: Skills and qualifications Relevant experience Performance Attendance Disciplinary record Productivity or other measurable business-related factors The employer should also decide how the criteria will be scored before applying them. For example, if performance is being assessed, the employer should ideally use reliable appraisal records or other evidence rather than a manager’s general impression of who is performing well. Likewise, if attendance is included, the employer must take care not to disadvantage employees because of absences connected to disability, pregnancy or maternity. Can an employer use last in, first out? Potentially, but employers should be careful. Last in, first out, commonly called LIFO, means employees with the shortest service are selected first. It can sometimes be used as part of a redundancy selection process, but relying on length of service can create discrimination risks. For example, if younger employees are disproportionately selected because they tend to have shorter service, an employer may face an age discrimination issue. For many businesses, a broader scoring system based on relevant skills, experience and performance may provide a more defensible approach. What selection criteria should employers avoid? The selection process must not be used to target employees because of protected characteristics or because they have exercised certain legal rights. An employer should take particular care where the proposed criteria could disadvantage employees because of: Pregnancy or maternity Disability Age Sex Race Religion or belief Sexual orientation Gender reassignment Marriage or civil partnership There are also specific protections relating to matters such as family leave, trade union activities, whistleblowing and exercising certain statutory rights. Attendance is a common example of an apparently neutral criterion that can create problems. An employee’s absence may be connected to a disability or pregnancy-related circumstances, meaning that simply counting all absences in the same way could create legal risk. Selection criteria should therefore be checked for both direct and indirect discrimination. What if the employer gets the redundancy pool wrong? Getting the pool wrong does not automatically mean that a dismissal will be unfair in every case. The Tribunal will consider the circumstances and the overall fairness of the employer’s approach. However, an unreasonable or artificially narrow pool can create significant risk, particularly if it appears that the employer started with a preferred employee and constructed the process around that person. A poorly chosen pool can also have a knock-on effect. If the wrong people are placed into the pool, even perfectly objective scoring criteria may produce an unfair outcome. This is why employers should consider the pool before getting too far into the scoring exercise. KLG Law’s redundancy advice for employers covers selection pools, objective scoring criteria, consultation and other important stages of the redundancy process. Can employees challenge their redundancy selection? Yes. An employee who believes they have been unfairly selected can raise concerns during consultation and may have an opportunity to appeal following the decision. They may argue, for example, that: The selection pool was too narrow Other comparable employees should have been included The selection criteria were unfair The scoring was inconsistent The employer relied on inaccurate information The process was discriminatory The redundancy was not genuine The employer failed to consult properly Employees can also potentially bring Employment Tribunal claims where the legal requirements are met. For employers, the best protection is not simply having paperwork to show after a dispute arises. It is making sure the decision-making process was reasonable from the beginning. If a redundancy dispute has already developed, KLG Law’s Employment Tribunal solicitors can advise on the potential risks and next steps. Redundancy pool vs redundancy selection criteria These two parts of the process are sometimes confused. The redundancy selection pool determines who is being compared. The selection criteria determine how those employees are compared. For example, a company might identify eight employees performing similar sales roles and place them into one redundancy pool. It might then assess those eight employees against skills, performance, experience and attendance criteria. The employer should not use the selection criteria to decide who belongs in the pool. The pool should first be defined on a reasonable basis, after which the criteria can be applied consistently. Keeping these two decisions separate can make the process easier to explain and defend. What should employers document? A well-managed redundancy process should leave a clear record of how the employer reached its decisions. Before finalising the pool, employers should consider documenting: The reason for the redundancy exercise Explain what business change is taking place and why fewer employees are required. The proposed future structure Show what roles will remain and what work will need to be performed after the restructure. Why particular employees are in the pool Set out the reasoning behind the pool rather than simply listing names. Why other employees are outside the pool This can be particularly important where employees have similar or overlapping responsibilities. The selection criteria Record the criteria, weighting and scoring methodology before the scores are applied. Consultation feedback Keep a record of concerns raised by employees and how the employer considered them. The final decision Document the final scores, outcome and reasons. This documentation can be valuable if an employee later challenges the fairness of the redundancy process. When should employers take legal advice? Employers do not necessarily need a solicitor every time a single role disappears. The risk becomes greater where the proposed redundancy exercise involves multiple employees, overlapping roles, complex restructures or potentially discriminatory issues. Legal advice can be particularly useful where: There are several possible employees who could form the pool Job roles overlap significantly The employer wants to use a pool of one The business is restructuring rather than simply removing a role The proposed criteria may disadvantage a particular group There are employees on maternity or other protected leave The business recognises a trade union Employees have raised grievances or discrimination concerns The employer expects an Employment Tribunal challenge KLG Law advises employers on redundancy planning, selection pools and consultation and can help businesses assess the process before decisions are finalised. How KLG Law can help with redundancy selection Redundancy can be commercially necessary, but the way employees are selected can create substantial legal risk if the process is not handled carefully. KLG Law can advise employers on the full redundancy process, including identifying an appropriate redundancy selection pool, developing objective criteria, managing consultation, considering alternative employment and reducing the risk of unfair dismissal or discrimination claims. If you are considering redundancies and are unsure who should be placed in the pool, getting advice before the selection process begins can be particularly valuable. Speak to KLG Law’s employment solicitors for practical advice on your proposed redundancy process. Final Thoughts Choosing a redundancy selection pool is one of those decisions that can look straightforward on paper but become much more complicated when employees have overlapping roles. The safest approach is not to start with the question of which employee the business wants to lose. Start with the business change, identify the work that will remain, consider which employees carry out that work and then establish a reasonable pool. From there, objective selection criteria can be applied consistently and discussed properly during consultation. A fair redundancy process is not about finding a way to justify a decision that has already been made. It is about making sure the decision is reached through a reasonable process that employees have had a genuine opportunity to engage with. If your business is considering redundancies and you are unsure whether you have identified the right redundancy selection pool, KLG Law can provide employment law advice before the process moves too far forward.