The Employment Appeal Tribunal has recently given a reminder that the definition of a redundancy pool is down to the employer and will be difficult for employees to challenge.
In Family Mosaic Housing Association v Mr A Badmos [UK EAT/0042/13/SM], the employer undertook a redundancy process that involved reducing a team of five Regional Development Managers to four. The employer decided to pool all existing RDMs together, recognising shared skills across the two distinct roles within the group (delivery and new business). However, once the five RDMs had expressed a preference for the roles they would like to continue with in the new structure, it became apparent that two RDMs wished to apply for the two roles within the delivery part of the business, leaving three individuals wanting the two new business roles. The employer then decided to reduce the pool to cover just those three new business employees.
Whilst an employment tribunal found that this was unfair, the EAT robustly supported the employer, and confirmed previous case law that states that, once the pool has been determined by the employer 'it would be difficult for the employee to challenge it where the employer has genuinely applied his mind to the problem'.
The key here is that the employer must 'genuinely apply its mind' to the choice or pool. The decision may be surprising or difficult for an employee to understand but where employers have clearly given thought to the matter, it will be very hard for an employee or employment tribunal to interfere with that decision. It is absolutely vital, therefore, that employers carefully consider decisions around pooling and keep good notes of decisions made.
Unfortunately for the employer in this case, the dismissal of the claimant was still found to be unfair and tainted by race discrimination because the employer had failed to carry out the rest of the process properly. The EAT ruled that the employment tribunal had, quite correctly, found that the rest of the employer's process was to be criticised for a number of reasons, including that it had changed its mind throughout the process about how that process was to be carried out, it had failed to abide by various parts of the process it had advertised it would use for the selection, and it was unable adequately to explain a high number of negative comments written alongside the claimant's name during the selection process.
This is another important lesson for employers. The entire process, not just part of it, must be carefully thought through and documented and consistently applied to all affected employees. Good record keeping and transparency will be absolutely key to minimise the risk of employment tribunal claims.