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When is a ‘pool of one’ in a redundancy selection exercise reasonable?

If you are a SME in the process of making a redundancy where you have a ‘pool’ of one and you think that the procedure you are using is fair and reasonable because you only employ one person in that specific role, you will still have to ensure that you applied the ‘range of reasonable responses test’. In non-legal jargon this means that you have considered whether a pool of one is appropriate, i.e. do other employees carry out a similar role.

In this blog, I am going to examine the recent Employment Appeals Tribunal (EAT) decision in Wrexham Golf Co Ltd –v- Ingham UKEAT/0190/12/RN.

The Facts:

The employer, a Club, employed 11 employees (including the Claimant). The Claimant was a Resident Club Steward and his responsibly including the management of the bar, cashing up and locking up on an evening and having sole responsibility for the Club over the weekend.

In October 2010 the clubs board made the decision that money needed to be saved. A sub-group was appointed to look at all aspects of the bar and catering facilities including the cost of staff. The sub-group’s unanimous view was that the role of club steward was no longer required and that the bar and catering facilities would be combined to become one operation.

During his consultation period the Claimant wrote letter to the board putting forward a number of points in his favour including the need to make redundancies in the bar as that was operating at a profit while the catering facility was operating at a loss. He also queries whether other area within the Club had been considered for savings such as catering, administrative, greens and cleaning contracts.

Regardless of the above the Claimant was the only employee placed at risk of redundancy and was later made redundant. He appealed and his appeal was rejected.

A board member who was originally part of the sub-group which made the redundancy decision was involved in the Claimant’s redundancy hearing. Further, a different board member who again formed part of the sub-group which made the redundancy decision was a panel member at the Claimant’s appeal hearing.

The Employment Tribunal (ET) decision:

It was accepted on behalf of the Claimant that the dismissal was on the grounds of redundancy and therefore they referred to section 98(4) Employment Rights Act 1998 (ERA), which provides that

“The determination of the question whether the dismissal is fair or unfair (having regard to the reasons shown by the employer) –

(a) depends on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and

(b) shall be determined in accordance with equity and the substantial merits of the case.”

The ET decided that the Claimant was unfairly dismissed on the following basis:

  1. The employer did not “act within the range of reasonable responses” in choosing to make the Claimant redundant as they failed to consider the possibility of establishing any kind of pool. They failed to consider whether there was any overlap between the work carried out by the Claimant and any of the other bar staff employed by the employer.
  2. The Claimant should have been provided with more information during the consultation process and
  3. The employer was large enough to ensure that no member of the sub-group who made the redundancy decision was involved in the Claimant’s redundancy procedure.

The Employment Appeals Tribunal (EAT) decision:

The EAT examined the legislation and principles established through case law when looking at the issue of whether the ET’s decision on the question of whether the dismissal was unfair by reason of the failure of the employer to consider establishing a pool rather than concentrating upon the Claimant’s position as a bar steward.

They overturned the ET’s finding of unfair dismissal and re-mitted the case for a re-hearing in a fresh tribunal as they were conscious that the ET did not apply the test to the question whether it was reasonable to focus on the club steward as the person at risk of redundancy. This indicates that perhaps the ET should have asked itself whether it was reasonable for the Club to not have considered selection from a wider range of employees than just the Claimant.

Conclusion:

It is clear from the decision in Wrexham that when embarking on a decision of a ‘pool of one’ during a redundancy process you must consider whether or not you should select from a wider number of employees, particular when there is a clear overlap in the type of work that they undertake.

If you are an employer currently undertaking a redundancy process where you have a ‘pool of one’ or an employee who is in a ‘pool of one’ and need some guidance please do contact me for an initial 30 minute telephone consultation on 0113 350 4030 or at samira.cakali@scesolicitors.co.uk.


Please note that the information in this blog is to provide information of general interest in a summary manner and should not be construed as individual legal advice. Readers should consult with me or other professional counsel before acting on the information contained here.

Samira Cakali

Samira Cakali is a pragmatic and approachable solicitor advocate with extensive contentious and non-contentious experience in the fields of employment law as well as civil litigation, within a range of commercial businesses from SME’s to multinationals as well as senior executives.

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