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Myth: Employers can choose who to make redundant by operating a last in, first out policy

Reality: 

To dismiss someone fairly for redundancy you must adopt a procedure that is fair and reasonable in all circumstances. Part of this involves identifying fair selection criteria to determine those members of staff that you will retain and those you will make redundant.

The starting point is to consider criteria that are largely objective and measurable and do not discriminate against individuals who are protected from discrimination. In the past many employers adopted a policy of making redundant those with the shortest length of service (LIFO) as it was both simple and objective. However, since the enactment of equality and anti-discrimination legislation, LIFO cannot be used as the only measure to decide who is going to lose their jobs in a redundancy situation. This is because younger people are most likely to be selected for redundancy and this amounts to a disadvantage based on age and may give rise to a claim for indirect age discrimination.

That is not to say that LIFO must be avoided altogether. Provided that you use other fair criteria to provisionally select candidates to be made redundant, LIFO could be used as a tie-breaker between two candidates who otherwise score equally on other criteria or alongside other criteria. In this context, if you weight criteria (to reflect the most important factors to your business), LIFO should not be weighted more highly than other criteria.

You have the flexibility to choose the most appropriate criteria and assessment method to reflect the skills you wish to retain in your business. ACAS recommends that appropriate criteria might include:

  • Attendance records (but you must ensure that this is fully accurate and that the reasons for absence are known – as you may have to discount some absences such as those linked to disability or pregnancy)

  • Disciplinary records

  • Skills or experience

  • Standard of work performance
  • Aptitude for work

However, you are not limited to these. You must have an evidential basis for the application of your scores, such as HR records, appraisals etc. Not all of your selection criteria has to be entirely objective but if you use qualitative criteria (which are more abstract) you must be able to point to supporting evidence to avoid complaints of bias, or arguments that the scoring was an expression of opinion rather than fact. 

Once you have applied your selection criteria and provisionally selected employees for redundancy, you should meet with them individually to discuss their scores (and, if necessary, make any adjustments) and consider if there are other suitable roles within your business that you can offer them to avoid redundancy. If no suitable alternative roles are available, you can proceed to terminate the employee on notice. Most employers also offer the employee the right to appeal against their dismissal. 

Don’t forget that it is good practice (and may be required under your contractual policies) to allow employees to be accompanied by a colleague or trade union official at this and any subsequent meeting.

Published: May 2018


Employment Law Update - May 2018

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Alan Lewis