Redundancy Pools: Fair Selection Criteria for UK Employers

Redundancy is one of the toughest parts of running a small business.

Even when the commercial reasons are clear (cash flow pressures, reduced demand, a restructure, or a site closure), the legal risk often comes from how you select people for redundancy - not just why you’re doing it.

That’s where redundancy pools come in. If you get the pool wrong (or you can’t clearly explain it), you can quickly find yourself facing grievances, low morale, and potentially an unfair dismissal claim.

In this guide, we’ll break down what redundancy pools are, when you need one, how to build one fairly, and how to document your decision-making so you can stay compliant while making difficult changes to your team.

What Are Redundancy Pools (And Why Do They Matter)?

A redundancy pool is the group of employees you place “in scope” for redundancy selection. In other words, it’s the group you compare against each other using fair selection criteria (like skills, performance, qualifications or disciplinary record) to decide who will be made redundant.

For small businesses, redundancy pools matter because they sit right at the heart of a fair redundancy process:

• They help you avoid “pre-selecting” someone. If you identify an individual first and then build the process around them, that can look unfair.
• They show you’ve considered alternatives. A good pool helps demonstrate that you thought carefully about whose roles are genuinely at risk.
• They reduce discrimination risk. If your pool is too narrow (or too wide), it can accidentally disadvantage employees with protected characteristics.
• They support meaningful consultation. Employees need to understand the “why” behind the pool so they can respond and suggest alternatives.

It’s also worth noting: the law doesn’t give a single fixed rule for what a redundancy pool must look like. What matters is whether, in your circumstances, the pool selection is reasonable and the redundancy process is fair.

Do You Always Need A Redundancy Pool?

Not always - but many redundancies will involve some kind of pooling decision, even if it’s a “pool of one”.

Here are common situations:

1) Pool Of One (Sometimes Appropriate)

A “pool of one” is where only one employee is in the selection pool, and that employee is the one whose role is at risk.

This can be reasonable if, for example:

• the role is genuinely unique within your business (no other employees do similar work);
• the role is disappearing completely (not just being reduced); or
• there’s a site closure and only one employee is assigned to that location in that role.

But a pool of one can also be risky if other employees do similar work or could reasonably be expected to do it. In that scenario, an employee could argue you should have pooled them with others doing comparable roles (or interchangeable work).

2) Multiple Employees Doing Similar Work (Pooling Likely Needed)

If you have multiple employees doing similar roles, and you need to reduce headcount, a redundancy pool is usually needed so you can select fairly between them.

Example: you have five warehouse operatives and need to reduce to three. The redundancy pool is likely “warehouse operatives” (or possibly a wider operational pool, depending on interchangeability).

3) Restructure Where Duties Overlap

Restructures are where pooling decisions get tricky. If you’re removing one role but keeping another similar role (or creating a new role with overlapping duties), you’ll need to think carefully about whether employees are doing similar work or are interchangeable.

If you already have strong HR foundations - like clear job descriptions in your Employment Contract and consistent policies in a Staff Handbook - it’s much easier to justify why certain roles are in (or out) of scope.

How To Identify The Right Redundancy Pool (A Practical Checklist)

When you’re deciding on redundancy pools, you’re essentially answering this question:

“Whose work is disappearing or reducing, and who should fairly be considered for selection?”

Here’s a practical checklist to guide your redundancy pool decision.

Step 1: Be Clear On The Redundancy Situation

Start by documenting the business reason for the redundancy. Common reasons include:

• a reduced need for employees to do certain work;
• a site closure or relocation;
• loss of funding or contracts;
• restructuring to improve efficiency.

This matters because your pool should align with the underlying business change. If your reason is “we need fewer staff doing X”, your pool should likely focus on staff who do X (or comparable/interchangeable work).

Step 2: Identify Employees Doing The Same Or Similar Work

List out employees who:

• have the same job title;
• perform similar tasks;
• work in the same team or function; and/or
• could reasonably cover each other’s work.

Don’t rely on job titles alone. In small businesses, job titles can be informal and duties can overlap. What matters is the reality of the work being done.

Step 3: Consider “Interchangeability” (This Is Often The Deciding Factor)

Interchangeability is a common way to think about pooling. Ask:

• Can these employees be moved between tasks without major retraining?
• Do they have similar skills and experience?
• Have you historically used them interchangeably?
• Would customers/clients see their roles as essentially the same?

If the answer is “yes”, you may need a broader pool than the one you first had in mind.

Step 4: Check For “Artificially Narrow” Pools

A redundancy pool can become legally risky if it looks like it was designed to target one person, or to exclude others who should fairly be considered.

Red flags include:

• only placing one person in scope when several people do overlapping duties;
• excluding part-time staff from a pool without a strong reason;
• excluding employees on maternity leave, sick leave, or other protected leave;
• drawing pool boundaries that align suspiciously with age, gender, disability, race, etc.

This is where a careful, documented rationale is essential.

Step 5: Sense-Check The Pool With The Alternatives

Before finalising the pool, ask yourself:

• Are there any suitable alternative roles you could offer (instead of redundancy)?
• Could hours be reduced, or could there be a reallocation of duties?
• Could you run a voluntary redundancy process first?

Even if none of these work, showing that you considered them can strengthen the fairness of your overall process.

How To Select Fairly Within Redundancy Pools (Scoring, Criteria, And Evidence)

Once you’ve identified redundancy pools, the next step is to decide how you’ll select employees for redundancy from within the pool.

In practice, small businesses often use a scoring matrix - and it needs to be defensible, consistent, and as objective as possible.

A helpful way to structure this is with a redundancy scoring matrix that sets out:

• your selection criteria;
• how each criterion is scored (e.g. 1–5);
• what evidence supports each score; and
• who is responsible for scoring and moderation.

Common Redundancy Selection Criteria

Criteria should reflect legitimate business needs and the future requirements of the role(s). Common criteria include:

• Skills and qualifications (including training required for future plans)
• Performance (based on appraisals and documented outcomes)
• Disciplinary record (based on documented warnings)
• Attendance (but be extremely careful: disability-related absences and pregnancy-related absences should not be scored in a way that disadvantages protected groups)
• Experience relevant to future business needs

Tip: Avoid vague criteria like “attitude” or “team fit” unless you can define them clearly and score them consistently with evidence. Subjective criteria can create discrimination risk and make the outcome harder to defend.

What Evidence Should You Use?

For each score, you should be able to point to something concrete, such as:

• recent performance reviews;
• KPIs or sales figures (where relevant);
• training records;
• disciplinary notes and warnings;
• absence records (handled carefully and lawfully).

If you don’t have formal evidence, it doesn’t mean you can’t proceed - but it does mean you should slow down, document what you reasonably can, and consider getting tailored advice. Moving quickly without evidence is where small businesses often get into trouble.

Keep The Process Consistent

If multiple managers are scoring, use moderation to ensure one manager isn’t harsher than another.

Consistency is also why it helps to have clear internal processes around performance and conduct. If you’re using performance as a criterion, but performance issues have never been raised formally, that can create arguments about unfairness (or surprise).

Consultation And Documentation: Staying Compliant (And Avoiding Costly Disputes)

Redundancy pools and scoring don’t exist in a vacuum. They need to be paired with a fair consultation process and good record-keeping.

Meaningful Consultation (Not Just A Tick-Box Exercise)

Consultation should give employees a real opportunity to understand what’s happening and to respond - including challenging the redundancy pool or the scoring.

Depending on the situation, consultation may involve:

• explaining the business reasons for redundancy;
• explaining how the redundancy pool was chosen;
• explaining the selection criteria and proposed scoring approach;
• discussing alternative roles and ways to avoid redundancy;
• considering employee feedback and proposals.

Timing matters too. If you’re proposing to dismiss 20 or more employees as redundant at one establishment within a 90-day period, you’ll usually trigger collective consultation duties (including consulting appropriate representatives and notifying the Secretary of State using an HR1 form). As a guide, the minimum collective consultation periods are typically at least 30 days before the first dismissal takes effect (for 20–99 redundancies) and at least 45 days (for 100+ redundancies). Getting this wrong can be expensive - including the risk of a protective award.

It’s worth having a clear handle on redundancy consultation periods so you can plan properly and avoid accidental non-compliance.

Notice, Pay, And Final Steps

Once you’ve completed consultation and made a decision, you’ll need to confirm outcomes in writing and ensure employees receive:

• the correct notice (or pay in lieu of notice if applicable);
• any accrued but unused holiday pay;
• statutory redundancy pay (where eligible) and/or contractual redundancy pay;
• a clear explanation of their right to appeal.

Notice can be a common area of confusion, particularly where contracts provide enhanced notice or where an employee has long service. Having a clear process for redundancy notice periods can help you avoid disputes at the end of an already difficult process.

Suitable Alternative Employment (And Priority Protection)

A key part of a fair redundancy process is properly considering suitable alternative employment. This means looking for any suitable vacancies in your business (and, where relevant, associated employers) and offering them to affected employees where appropriate. If an employee unreasonably refuses a suitable alternative role, it can affect their entitlement to statutory redundancy pay.

Also be aware that some employees have priority for suitable alternative vacancies. In particular, employees on maternity leave, adoption leave or shared parental leave generally have the right to be offered a suitable alternative vacancy (if one exists) in preference to others. This protection also extends to certain circumstances relating to pregnancy and a period after returning to work from relevant family leave.

If a suitable alternative role is offered, a statutory trial period usually applies (commonly four weeks), which can help both sides assess whether the role works in practice.

Document Everything (Because Memories Change Later)

In a small business, it’s common for decisions to be made quickly and verbally. With redundancy, that’s a risk.

Keep a clear paper trail of:

• the business rationale for redundancies;
• how the redundancy pool was decided (and why alternatives weren’t used);
• the selection criteria and scoring evidence;
• consultation meeting notes and correspondence;
• consideration of suitable alternative employment (and why roles were or weren’t suitable).

This isn’t about being bureaucratic - it’s about protecting your business if the decision is questioned later.

Key Takeaways

• Redundancy pools are the group of employees you place in scope for selection, and they’re a key part of showing your process was fair and reasonable.
• You don’t always need a large pool, but a pool of one should only be used where it’s genuinely justified (for example, a unique role that’s disappearing).
• When deciding on redundancy pools, focus on similar work and interchangeability, not just job titles.
• Use clear, evidence-based selection criteria and a structured scoring matrix to reduce subjectivity and discrimination risk.
• Run a meaningful consultation process, follow any collective consultation obligations that apply, and keep thorough records explaining why the pool was chosen and how decisions were made.
• Actively consider suitable alternative employment and be mindful of employees with priority rights to be offered suitable vacancies.
• If you’re unsure about your pool boundaries, scoring criteria, or consultation obligations, it’s worth getting tailored advice early - it can save you time, cost, and stress later.

This article is for general information only and isn’t legal advice. Every redundancy situation is different, and getting advice early can help you avoid costly mistakes.

If you would like help with redundancy planning, selecting redundancy pools, or running a compliant consultation process, you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.