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Choosing the selection pool
An employer has wide discretion when choosing the selection pool, and a challenge to the fairness of a dismissal on this basis is likely to be very difficult, as long as the employer can show it thought carefully about who should be in the pool (Fulcrum Pharma v Bonassera [2010] UKEAT/0198/10). A tribunal is only likely to interfere if the decision is so flawed that no reasonable employer could have made it:
An employer needed to make one redundancy from a team of four actuaries, Many of the pension schemes administered by the claimant, Ms Byard, had been wound up or the clients had been lost. The employer placed Ms Byard in a pool of one, arguing that it was important not to disturb existing client relationships.
The tribunal examined the evidence and found that the risk of losing clients by changing actuaries was slight, and that the employer had not genuinely applied its mind to deciding who should be in the pool. The tribunal noted that the employer’s decision to limit the pool to one undermined the effectiveness of the consultation, by making it impossible for Ms Byard to argue that another actuary should have been selected instead of her. The EAT refused to overturn the tribunal’s finding that the dismissal was unfair.
Capita Hartshead Limited v Byard [2012] UKEAT 0445/11
In Halpin v Sandpiper Books Limited ([2012] UKEAT/0171/11/LA), the EAT reached the opposite conclusion, concluding that a pool of one was within the band of responses of a reasonable employer. Mr Halpin was the only employee based in the China office, so when the employer decided to close down the Chinese operation, he alone was selected for redundancy. He argued that since he shared administrative and sales skills with the UK-based staff, they should all have been included in the pool, since he was capable of doing their jobs as well as his own. The EAT disagreed, reminding the parties that selection for redundancy only becomes relevant where there are “a number of similarly qualified possible targets for redundancy”.
An employer’s desire to avoid demoralising or worrying other employees by placing them in a pool at risk of redundancy is never a fair reason for limiting the pool.