Large-scale redundancies may not be happening (fortunately) to the same extent as in the aftermath of the financial crash of 2008 (and it’s too early to talk meaningfully about the possible implications of Brexit), but we are still often asked to advise clients in connection with smaller-scale redundancy exercises, often arising as a result of a business restructure.
In this blog post and six more to follow it, we share learning points for HR from recent redundancy exercises we have advised on.
Ensure selection criteria are clear and address the challenges faced by the business
We all know that you need to use selection criteria that are so far as practicable objective and job-related. This can sometimes be more easily said than done. Ideally the managers running the business should be involved in selecting the criteria to ensure you retain those employees with the skills and experience you require in the business going forward.
Think also about the weighting of your criteria – is a 3 in “time-keeping” really as valuable as a 3 in “business development skills”? If certain attributes are more important to the company’s future than others, then reflect this in the weightings or you will find your selection decisions hobbled by good scores in unimportant respects.
On a related point, keep your scoring simple, 1 to 5 at most. Bear in mind that someone who is put at risk after a scoring exercise may have only a point or two off safety, so the ability to defend and justify that gap will be paramount. If you score out of 10, therefore, you will need to be able to explain what separates a 6 from a 7 or an 8 from a 9 in each criterion, which will be substantially impossible in most cases since the gradations are too fine.
When choosing your criteria, remember also: (i) that if you are looking at 20 or more redundancies within 90 days you will need to consult about the criteria with elected staff representatives (and that “consult” means that you have not definitively already chosen them); and (ii) that internal email discussion of proposed criteria will all be disclosable in Tribunal, so do avoid any reference to ensuring that your criteria will allow you to retain Mr X and weed out Ms Y, etc.
Check that your scorers understand what you mean by the chosen criteria. In a recent exercise the employer had chosen “skills and experience” and “performance” as separate selection criteria. Whilst these were intended by HR to mean different things (“skills and experience” referred to qualifications and past experience and “performance” referred to an employee’s performance in his current role) the managers carrying out the exercise were unclear how they differed, which made it very difficult for them to carry out an effective selection exercise. As a result they struggled to deal with questions from employees when challenged about them and could have come badly unstuck under cross-examination in Tribunal. Make sure also that they understand any relevant scoring “rules” (e.g. any sort of forced ranking) and that giving everyone an “average” score to avoid later grievances is totally self-defeating.
Last, it is worth HR going through the provisional list of “at risk” employees to identify any who are (or have been) on maternity leave or long-term sick leave in order to ensure their selection has not inadvertently been influenced by discriminatory factors.