As the furlough scheme begins to change, and employers’ contributions to the costs increase from next month, many businesses may now be turning their attention to the longer term viability of their business.  This may include whether they can afford the increased contributions, or must now consider measures to reduce overheads, including redundancies.

However, with the difficult decision to make redundancies comes the even more difficult decision of who to make redundant.  Whilst the pool is at the discretion of the employer, it is important it is given due consideration and that the discretion is exercised reasonably.  When deciding the selection pool (the people at risk of redundancy), I always advise employers to think in terms of roles, rather than people.  To do otherwise leaves an opportunity for employers to fail to properly consider the selection pool and leave themselves open to potential claims for unfair dismissal.  For example, if an employee, we’ll call him Frank, is a Customer Services Manager, you might consider that you could do without his work.  You might think “Frank could be made redundant”.  However if the reality is that you have three Customer Services Managers or three people in the department carrying out ostensibly the same role (even if they have different job titles), this thinking may lead to a claim that all three roles should’ve been considered and that in jumping straight to the decision to make Frank redundant, you have failed to follow a fair process.

The second warning I would give to employers when considering redundancies is not to automatically select employees who are currently furloughed.  I can see how this thinking might be tempting.  If you’ve managed without Frank for the past three months whilst he’s been furloughed then it could be easy to say his work could be absorbed by the remaining team members, leaving him redundant.  However, again to do so without considering whether others should be included in the pool or whether Frank is objectively the best candidate for redundancy, could lead to claims that you have failed to properly consider the pool and/or to follow a fair selection process.

In addition, with furlough often being offered to employees who are shielding, pregnant or unable to work currently due to childcare or other caring commitments, automatically selecting those on furlough may mean that those selected are more likely to be disabled, pregnant or on maternity leave, or women (who typically bear the brunt of caring responsibilities).  This may leave you open to claims for direct or indirect discrimination.

Overall when considering redundancies, it is important to think carefully about the pool and to use fair and objective selection criteria. If you are entering into a redundancy process, it may be worth taking some advice on the process to be followed, and best practice to avoid claims in the future.

Should you have any queries about the issues raised in this article, or on any employment related matter, please contact our expert Arvin Sandhu by email or on 01494 893 542.