UK: Employers should consult before adopting redundancy selection criteria which effectively determine a pool of one

Carrying out a fair redundancy usually involves identifying an appropriate pool from which to provisionally select employees using fair selection criteria, and then consulting with the individual(s) provisionally chosen.  A recent EAT decision has made clear that an employer may need to consult at an earlier stage, prior to the choice of criteria, if the practical result is that the selection is made by the choice itself placing the individual in a pool of one (where others could have been included).  For consultation to be meaningful, it must take place at a time when the individual has a chance of influencing the outcome.

In Mogane v Bradford Teaching Hospitals the employer was facing financial difficulties and decided to reduce the number of Band 6 nurses.  Two Band 6 nurses were on fixed-term contracts and the sole criterion chosen was whose fixed term contract ended soonest, inevitably leading to a pool of one.  The EAT ruled that it was not reasonable for the employer to do so without first giving the individual an opportunity to discuss that criterion (and have the employer consider any alternatives suggested, such as length of service or performance).

An employer does have a wide discretion in choosing a pool (the choice must simply be within the range of reasonable responses) and a pool of one can be fair in some cases.  However, if there is more than one employee, a pool of one should only be adopted after consultation with the individual.  The same approach will be prudent where a small pool is the same size as the number of redundancies.  The EAT ruled that the implied term of trust and confidence requires that employers will not act arbitrarily towards employees in the methods of selection for redundancy.

The case also serves as a reminder that non-renewal of a fixed term contract is a dismissal, so fixed-term employees with two years' service can bring unfair dismissal claims and a fair procedure is important.  Employers should also bear in mind that selecting employees because of their fixed-term status will be unlawful unless objectively justified.