How to Set Redundancy Selection Pools in the UK Lawfully

Making redundancies is one of the toughest calls you’ll make as a small business owner. When roles genuinely disappear, you must still run a fair and lawful process - and that starts with getting your redundancy selection pool right.

If you define the pool too narrowly, you risk claims of unfair dismissal. Too broadly, and you may create unnecessary disruption. The good news? With a clear method, objective criteria and good documentation, you can reduce risk and treat your team fairly.

In this guide, we explain what a redundancy selection pool is, when you need one, how to set it up properly, and the step-by-step process to follow under UK law.

What Is A Redundancy Selection Pool?

A redundancy selection pool is the group of employees you consider together for redundancy when your business needs fewer people to do the same or similar work. You identify the pool first, then apply objective selection criteria to decide who is provisionally selected.

Redundancy is about the role, not the person. It usually arises because:

• the business has closed or intends to close (in whole or part),
• the workplace has moved, or
• you need fewer employees doing a particular kind of work.

Defining the pool correctly is the foundation of a fair redundancy process. If the pool is unreasonable (for example, it excludes obvious comparators doing similar work), any resulting dismissal can be unfair even if you consult and score people carefully. The fairness duty largely flows from the Employment Rights Act 1996, which requires a fair reason and procedure for dismissal.

When Do You Need A Pool (And When You Don’t)?

You’ll usually need a redundancy selection pool when more than one employee does the same or similar work, and the business needs fewer of those roles. For example, if you have four customer service assistants and you only need two, the obvious pool is those four assistants.

Sometimes, a pool of one is reasonable - for instance, if there’s a genuinely standalone role that’s disappearing, with no overlap elsewhere in the team. But you should think critically about whether there are “obvious comparators” who could also perform that work (even if their job titles differ). If there are, they should generally be in the pool.

Ask yourself:

• Who currently performs the same or similar tasks?
• Who has interchangeable skills and could do the work with minimal training?
• Are there temporary staff, fixed-term workers or part-timers doing similar work who should be considered?

As a small business, it’s easy to default to a single person’s role because the team is lean. Still, tribunals will look at substance over titles. If two roles overlap materially, pooling both is safer. This thinking also supports fairer outcomes and better buy-in from your team.

Note: if you’re proposing 20 or more redundancies at one establishment within 90 days, collective consultation rules apply, including election of employee reps and specific timelines. Failing to follow collective consultation can lead to a “protective award” of up to 90 days’ pay per affected employee.

How To Define The Pool And Set Fair Criteria

The law doesn’t prescribe an exact formula for pooling, but it does expect reasonableness. In practice, that means thinking widely, documenting your rationale, and using objective, evidence-based criteria.

1) Define Your Pool Thoughtfully

• Start with the function, not the job title. If multiple people deliver the same service or output, they’re likely in the same pool.
• Consider interchangeable roles. If staff can cover for each other (even if they’re in different teams), explain why you have included or excluded them.
• Be consistent. If you include one part-timer in the pool, include other part-timers in similar roles unless you have a defensible reason not to.

Record your decision-making. A simple note explaining why you’ve included certain roles (and excluded others) is powerful evidence if your process is later challenged.

2) Consider “Bumping” Where Appropriate

“Bumping” is when you identify someone at risk of redundancy and consider whether they could move into a different role, potentially displacing another employee with less service or lower scores. This isn’t mandatory, but tribunals expect you to at least consider it - especially in small teams where roles can be reshaped. Document your considerations, even if you decide bumping isn’t workable.

3) Choose Objective, Evidence-Based Criteria

Your selection criteria should be capable of consistent scoring from records, not impressions. Common lawful criteria include:

• Skills, qualifications and experience relevant to current and future needs
• Performance (based on appraisals, objective KPIs or outputs)
• Attendance record (excluding protected absences, such as pregnancy-related or disability-related absence)
• Disciplinary record (based on live warnings only)
• Flexibility and ability to cover various tasks (if genuinely needed)

Give each criterion a clear description and weight (for example, performance 40%, skills 40%, attendance 20%). Use a scoring matrix with defined scales (e.g., 1–5 with descriptors) and ensure managers understand how to apply it consistently.

4) Avoid Discriminatory Or Vague Criteria

Do not use criteria that directly or indirectly discriminate under the Equality Act 2010 (for example, age, disability, sex, pregnancy and maternity, race, religion or belief). Watch for indirect discrimination - for instance, “last in, first out” can disadvantage younger workers, and raw absence scores can disadvantage disabled employees or those with pregnancy-related absence if you don’t make appropriate adjustments.

Avoid subjective criteria like “attitude” or “fit” unless you can translate them into clear, job-related behaviours supported by evidence. If in doubt, keep criteria tightly linked to the skills and performance your business actually needs.

Running A Fair Redundancy Process Step By Step

Once you’ve defined your redundancy selection pool and criteria, follow a fair, transparent process. This protects your team and reduces the risk of unfair dismissal claims.

Step 1: Plan And Prepare

• Draft your business case explaining why roles are at risk (e.g., reduced demand, restructure, cost-saving). Be specific about the change and the numbers.
• Define the pool, selection criteria and scoring matrix. Decide who will score and how to quality-check consistency.
• Prepare a timeline for consultation, scoring, meetings and outcome communication. If collective consultation applies, plan for the statutory steps.

Check your contract terms and policies for notice periods, redundancy pay enhancements, selection processes or appeal routes that you’ve committed to. Having a clear Employment Contract makes this part much smoother.

Step 2: Consult With Those At Risk

Consultation isn’t a tick-box exercise - it’s a genuine discussion about proposals and ways to avoid or reduce redundancies. Invite affected employees to a meeting and outline:

• the reasons for the proposed redundancies,
• the proposed pool and selection criteria, and
• the timeline and how they can give input or alternatives.

Allow reasonable time for feedback. Keep notes of meetings and follow up in writing summarising what was discussed. Proper consultation is a core element of Ending an Employment Contract Fairly.

Step 3: Score Objectively (And Double-Check)

Score employees in the pool independently (ideally by two managers) using the matrix and evidence. Examples of evidence:

• recent appraisals and KPI reports (for performance),
• qualifications and training records (for skills), and
• absence reports with protected absence discounted (for attendance).

Then conduct a moderation meeting to iron out inconsistencies. Keep a paper trail of the final agreed scores and the evidence behind them.

Step 4: Provisional Selection And Further Consultation

Invite provisionally selected employees to an individual meeting. Share their scores (and how they compare to the selection threshold), explain your reasoning and give them a chance to challenge scores or present alternatives (e.g., job-share, reduced hours, or different ways to save costs). Be open to reasonable adjustments and further review if strong evidence emerges.

Step 5: Explore Alternatives And Suitable Alternative Employment

You are legally expected to look for ways to avoid dismissal, such as:

• redeployment to other roles (even at a lower grade, by agreement),
• reasonable training to bridge a skills gap,
• voluntary redundancy or voluntary reduction in hours, and
• freezing recruitment and using natural attrition.

If you identify a “suitable alternative role,” offer it. Employees who unreasonably refuse a suitable alternative may lose entitlement to redundancy pay. There’s a statutory four-week trial period for alternative roles.

Step 6: Confirm Outcomes, Notice And Pay

Once consultation concludes, communicate final decisions in writing. Your letter should cover:

• the reason for redundancy,
• the pool, criteria and scores summary,
• why they were selected,
• notice period and whether they will work it or be paid in lieu,
• statutory (and any contractual) redundancy pay,
• their right of appeal, and
• support such as time off to attend interviews.

Where possible, offer an appeal to a manager not previously involved. This can correct mistakes early and reduces litigation risk.

If you’re navigating complex scenarios - for example, overlapping pools, collective consultation or enhanced redundancy terms - consider tailored Redundancy Advice to make sure your process is watertight.

Small Business Pitfalls To Avoid And Practical Tips

Redundancy processes can feel heavy for a small team, but attention to a few hotspots will save you pain later.

Don’t Use Redundancy To Tackle Poor Performance

If the real issue is performance, redundancy is the wrong tool and can lead to unfair dismissal claims. Use a structured Performance Improvement Plan and address capability properly. Redundancy should only be used where the role itself is no longer needed.

Avoid Narrow Pools Without A Clear Rationale

A pool of one can be justified, but only where the role is genuinely standalone. If others do similar work or have interchangeable skills, widen the pool and document why. “We always treated this as a unique role” is rarely enough on its own.

Beware Of Indirect Discrimination In Criteria

Watch for criteria that disadvantage protected groups unless you can objectively justify them. Adjust attendance scoring to exclude pregnancy-related and disability-related absences. If flexibility is a criterion, be clear it’s about business needs rather than a preference for those without caring responsibilities.

Keep Records - They’re Your Best Defence

Save your business case, consultation notes, scoring matrices, and decision letters. If challenged, contemporaneous records are the difference between a robust defence and a costly settlement. Many employers lose Employment Tribunals not because their reasons were wrong, but because their paperwork was weak.

Know When Collective Consultation Applies

If you’re proposing 20 or more redundancies at one establishment within 90 days, you must collectively consult with elected representatives and notify the Secretary of State (via the HR1 form). Timelines vary depending on numbers. Missing these steps can lead to a protective award of up to 90 days’ pay per affected employee, plus fines.

Align Your Contracts And Policies With Practice

Clear contracts and policies reduce friction and ambiguity. Your Employment Contract should set out notice, pay in lieu clauses, and any enhanced redundancy terms if you offer them. A practical Staff Handbook can include your approach to consultation, appeals, selection principles and redeployment.

Handle Departures Professionally

When it’s time to bring the process to a close, follow the same fairness principles you’d expect if the roles were reversed. A structured approach to Ending an Employment Contract Fairly helps you protect your culture and reputation, as well as keep you compliant.

Key Takeaways

• Start with the work, not job titles. A redundancy selection pool should include everyone doing the same or similar work, including those with interchangeable skills. Document why you’ve included or excluded roles.
• Use objective, evidence-based criteria. Typical criteria include skills, performance, attendance (with protected absences excluded), disciplinary record and flexibility. Avoid vague or discriminatory measures.
• Consult meaningfully. Share the business case and proposed criteria, invite feedback, and consider alternatives to dismissal. Proper consultation is central to fairness under the Employment Rights Act 1996.
• Score consistently and keep records. Use a scoring matrix, moderate results for consistency, and retain evidence. Good paperwork is your best protection if decisions are challenged.
• Offer suitable alternatives and communicate clearly. Explore redeployment and reasonable training. Confirm outcomes in writing with notice, redundancy pay, and appeal rights.
• Get your documents in order. Up-to-date Employment Contracts and a practical Staff Handbook help you stay consistent and compliant.
• If in doubt, get tailored help. Complex scenarios (e.g., collective consultation, bumping, enhanced terms) are where expert Redundancy Advice pays for itself.

If you’d like help setting up a fair redundancy selection pool, sense-checking your criteria or running the process end-to-end, our team is here to help. You can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.