Composition of the Pool of Employees for the Purpose of Redundancy

Composition of the Pool of Employees for the Purpose of Redundancy

In these times of continued “rationalisation” of work forces, employers and employees alike have become acquainted with the concept of the pool of employees from whom numbers will be selected for redundancy.  Employers and employees will sweat over matrices, employers will be advised how limited the categories can be on such documents and employees will cry foul if they believe that either they have been unfairly included in the pool or, that others should have been included in the pool but were not.

The pool concept arises when an employer comes to the conclusion that he has to reduce the work force.  He has to then decide which employees will fall into the pool and be in the line of fire.  This is not always an easy decision to make.

In the case of Fulcrum Pharma (Europe) Limited v Bonassera [2010] UKEAT 1198110 a company decided that there was a redundancy situation due to the downgrading of the HR function.  There was one HR Manager in the firm and the company decided that accordingly there was a pool of 1.

The HR Officer concerned disagreed.  She said there should have been a pool of 2 because there should have been included within that pool her junior assistant in the HR department.

Harvey on Industrial Relations and Employment Law (the Employment “Bible”) suggests that in general the pool should include all those employees carrying out work of the particular kind “but it may be widened to include other employees such as those whose jobs are similar to or interchangeable with those employees”.  Similarity can be a controversial issue but the concept is less difficult when comparing employees of a similar seniority (a “horizontal” comparison compared with a “vertical” comparison).

This case did indeed deal with a vertical comparison because the HR Manager pointed to cases where an immediate junior had been placed into a pool and she herself had originally undertaken the junior role before promotion to the senior role.

The Employment Appeal Tribunal reiterated that every case turns on its own facts, but suggested that there were relevant factors which should be considered and weighed in deciding who should be included in the pool in these circumstances.  These should include:-
•    how different the two jobs are;
•    the difference in remuneration;
•    the relevant lengths of service of the two employees;
•    and the qualifications of the employee in immediate danger of redundancy.

The moral of this case seems to be that pool selection cannot always be limited to horizontal comparison.  An employer must also give more than passing consideration to vertical comparison in these circumstances.

For advice and assistance in respect of Redundancy or other employment matters, please contact Nigel Pepper, Consultant or Patrick Nelson, Associate, on 01785 211411.

5 March 2011

Disclaimer

The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances. (50587)