Avoiding unlawful discrimination when making redundancy decisions

Making redundancies is one of the most difficult situations any employer can face.

Read the Core guidance to make sure you know what equality law says you must do as an employer.

This section looks how you can make sure you are not discriminating unlawfully in selecting people for redundancy, and in particular:

Redundancy procedures and criteria

Making sure a redundancy dismissal is fair

This guide only tells you about equality law. There are other laws which you need to follow to make sure a redundancy dismissal is fair. You can find out more about these from Business Link and Acas. Following the procedures to make sure a redundancy dismissal is fair will also help you avoid unlawful discrimination.

Make sure that the redundancy procedures you follow and the criteria you use do not unlawfully discriminate either. Remember that in the case of disabled people, failing to make reasonable adjustments, including adjustments to redundancy criteria and procedures, is a form of unlawful discrimination.  There are also specific considerations to take into account when redundancies affect women who are pregnant or on maternity leave.

This applies whether you are seeking volunteers for redundancy or making compulsory redundancies.

However, it is possible to make redundancy payments based on age.

Which jobs are in the selection pool?

Which jobs do you need to select from? In other words, what is the pool from which you will be making your selection?

Are you, for instance, stopping a particular service or production line or closing a geographical location?

If you are not selecting everyone in a particular category of workers, such as everyone in a particular place or doing a particular job which will no longer be needed, you must make sure that your pool selection does not discriminate unlawfully.

For example:

An organisation is facing budget cuts and decides to reduce the size of its marketing team. There are four people in the team (one man and three women) and the employer decides to put just the two people who work part-time, who are both women, into the pool for redundancy, believing that their earnings are less important to them than to those people who work full-time, who are more likely to be ‘breadwinners’. Because women are more likely to work part-time, this approach will be indirectly discriminatory (having a worse impact on the two part-timers who are women and on other women than it does on men) unless the employer can objectively justify what they have done. An approach which would be less likely to discriminate unlawfully would be to put everyone in the marketing department into the pool.
 

Deciding on the matrix factors and how you score against them

Once you have decided on your pool, you still need to make sure that you think through the consequences of using particular criteria for selection for redundancy from the chosen pool. If you don’t do this, you might still end up discriminating unlawfully.

Good practice tips for avoiding unlawful discrimination

  • Use a selection matrix containing a number of separate selection criteria rather than just one selection criterion, to reduce the risk of any possible discriminatory impact.
  • Consult your recognised trade union if you have one.
  • Make sure that you – or anyone who scores employees against the criteria – have been trained on how to avoid unlawful discrimination.

We look at the following criteria in more detail, because they are criteria where you may be more at risk of discriminating unlawfully. In each case, whether there is unlawful discrimination will depend on there being a link between the impact of the criterion and the protected characteristic of the person being made redundant:

  • Length of service
  • Absence record and working hours
  • Training and qualifications

Length of service

It is possible to use a length of service criterion for selecting people for redundancy but only in certain circumstances:

  • A criterion like this needs to be used cautiously because it could indirectly discriminate.

For example:

If there are people in the pool who would end up being selected in greater numbers because a length of service criterion has been applied, such as:

Younger people who will not have built up as long an employment record

Women, who often have more interrupted careers, or

Disabled people, whose disability may have interrupted their career

Then using this criterion might be discriminatory. 

  • Length of service should only be one of the factors you consider when selecting people for redundancy.
  • As one of several selection criteria, it will probably be lawful (in the sense that it is likely to be objectively justified direct age discrimination) if you are using it with the aim of,

For example:

Respecting loyalty and protecting older workers who may find it more difficult to re-enter employment, or

Retaining experience

  • and you can show:

That length of service is a proportionate way of achieving your aim

Why your aim could not be achieved in another way that doesn’t disadvantage the selected workers to the same extent.

Depending on the size and nature of the pool for redundancy selection, you should use additional criteria based on other factors to make sure that you are selecting in a way that does not discriminate.

Absence record and working hours

If you use workers’ absence record or working hours to select people for redundancy, you must be careful to avoid direct or indirect discrimination.

For example:

  • If a woman is selected because of her absence on maternity leave or because of pregnancy-related illness, this will almost always be direct discrimination because of pregnancy or maternity. Find out more in our guide to managing redundancies which could affect women who are pregnant or on maternity leave.
  • If someone is selected because they have taken time off or because they work flexibly to care for a disabled relative, this risks being direct discrimination by association because of disability.
  • If a disabled person is selected because they have needed time off or because they work flexibly for a reason connected to their disability, this risks being discrimination arising from disability unless the employer can objectively justify using this criterion.
  • If a transsexual person is selected because they have used their right to take leave for treatment related to their gender reassignment, this may well be direct discrimination because of gender reassignment.

This means you need to consider which absences you will include if you are using attendance record as one of your criteria. Use only those which could apply to everyone regardless of their protected characteristics. This has implications for how absence is recorded, which is explained in our guide: What equality law means for you as an employer: working hours and time off.

Training and qualifications

The appropriateness of using qualifications to select people for redundancy will vary according to the situation. If you have two individuals working in similar roles, but one has an additional relevant qualification which adds to their ability to do the job, deciding to make the less well-qualified person redundant is unlikely to discriminate unlawfully.

You can also say that a person must have a particular qualification if that qualification is an essential requirement for the job that cannot be met by experience or further training.

However, if you use qualifications which are not especially relevant or define the qualifications too narrowly without thinking through the consequences, you may find you are unlawfully discriminating if the use of those qualifications would have a worse impact on people who share a protected characteristic and you cannot objectively justify this. For example, choosing to make redundant just those employees with a qualification from a non-British university. 

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