How to develop a redundancy matrix

To avoid unfair dismissal claims, employers are required to follow a lawful redundancy process at each stage, including the redundancy selection procedure.

Provided there is a genuine redundancy situation, the first stage will be to consult with affected employees. This will involve ascertaining if there are alternatives to redundancy, including suitable alternative roles. Where redundancies are unavoidable, you will need to identify who is to be dismissed. If there are several people at risk, you will need to follow a fair selection process to determine who will be made redundant.

Using a redundancy matrix can help employers ensure they are applying fair criteria when selecting workers for redundancy.

Ensuring fair selection for redundancy

To implement a fair redundancy selection procedure, you will need to:

• Consult your employees regarding the criteria you propose to apply to enable them to influence the process, if they feel they have contributed they are likely to be better engaged.
• Check if you have an existing collective agreement or contractual procedure governing selection criteria and if so, use this.
• As far as is practicable, choose objective criteria that can be verified by reference to data, for example, training records or appraisals.
• Avoid subjective criteria that could depend on personal opinion.
• Avoid direct or indirect discrimination in selecting workers for redundancy.
• Ensure that more than one person carries out the assessment to ensure fairness and impartiality.

You need to be able to clearly demonstrate you took a thorough approach to selection by:

• Remaining impartial and fair
• Carefully sifting through employees based on their contribution to your business
• Relying on a proven process

The role of the redundancy matrix

A redundancy matrix can help you select employees and is considered a reliable method for doing so. It pinpoints criteria against which individual employees will be scored, and by working hard at the beginning to identify what these are, you can use it as part of your consultation with those whose jobs are at risk. Completing the criteria sheet for each employee and keeping it as a record to show how you reached the decision.

A matrix identifies criteria against which you will be scoring individual employees – work hard to identify what these are and be open about this from the start, using it as part of your consultation with affected employees.  Completing this for each employee and keep it as a record of how the decision was made.

When developing a redundancy matrix you may want to consider:

Performance

If you can measure performance sufficiently, then you can include it. Good appraisal review systems, records of discussions, or performance reviews are all measures of performance. Although if you can measure it using sales figures or work output, this will be seen as much more objective. A word of caution here, you must ensure you adjust any time periods to take into account anyone who has been on maternity or parental leave, had disability related sickness absence or is new to the company. If you apply scoring to performance reviews, you should ensure you can show logical reasoning and are consistent across the selection pool.

It is common practice to carry out assessments of performance and ability by requiring all employees within the selected pool to take an interview or undertake other assessment exercises. If this is the case, you should let the employee know what information you will be taking into account and what you are interviewing for – allotting at least two people to conduct the interviews for the purposes of impartiality. You could also consider offering coaching or guidance to those employees who are affected, which could further demonstrate your commitment to objectivity.

Disciplinary records

These are commonly used in the process of scoring in a redundancy matrix exercise because it is an acceptable criterion; provided the scoring is consistent and applied in a reasonable way. Although you would need to ensure your records were accurate.

Attendance records

Are a potentially fair way to score individuals within the selected pool and will usually be seen as both measurable and objective. However, you need to ensure your records are 100% accurate and that you also consider the reasons for the absence. Anything related to maternity, pregnancy, other family leave reasons and disability, should be discounted if you want to avoid a costly claim for unfair dismissal and discrimination.

Take care that you do not make any assumptions about what a non-genuine absence might be – if you have robust policies and mechanisms for managing absence and return to work interviews, including making proper use of your sickness procedures, you are more likely to be able to claim you have used this criterion fairly. It is also worth remembering, that a previously undisclosed disability may emerge during the consultation process, which would need factoring into your scoring.

Length of service

The traditional “last-in – first-out” scenario now has the very real potential of being discriminatory on the grounds of age. It also doesn’t make very sound business sense to include it anyway, because your more skilled employees may have only recently joined your business and it may be more judicial to retain them in the long term.

Other selection criteria include:

• Overall skill set – assessment of skills should be based on those which will be required for your continuing business needs. Allocation of scores should reflect the range of skills the individual has, which are relevant and directly linked to the role.
• Qualifications – use of qualifications should be based on the essential and desirable qualifications or equivalent listed within the person specification for the role. If there were no specified qualifications required for the post, then this selection criterion should not be used.
• Experience – assessment of which should be based on that which is directly relevant to the continuing needs of your business. Allocation of scores should reflect the breadth and depth of experience relevant and directly linked to the role.
• Standard of work (not covered specifically by performance)
• Things that cannot be included in a redundancy matrix

An unfair redundancy selection can arise in a variety of ways, for example, if someone faces selection for parental reasons (such as due to pregnancy or maternity leave). This puts them at an unfair disadvantage, and as a result you run the risk of a discrimination claim being made against you.

You cannot include any of the following within your redundancy matrix, otherwise your decision will be considered automatically unfair:

• Reasons relating to health and safety
• Working time rights
• Asserting a statutory right
• Trade union membership or activities
• A TUPE transfer
• Making a protected disclosure
• Taking part in industrial action

Aside from avoiding the above, there is a wide range of criteria to choose from. Generally, tribunals don’t tend to have a view as to what these should have been, but you should ensure the criteria you decide upon are relevant to the job, are objective, and that you apply them reasonably and fairly across the board. Any vague criteria are likely to be seen as unfair, as is how much losing a particular employee could save the business.

How to attribute scores to employees

You can have different scores and levels of points corresponding to the importance of each criterion within your business. This is commonly referred to as “weighting”. For example, if it is agreed that an employee’s attendance record is less important than performance, you can attribute fewer points for this. For instance, you may score attendance out of 5 points and performance out of 10. In addition, you should also include written evidence against each of the criteria. This is so that if an employee asks to see their score, you should be able to justify your reasoning to them.

Example scoring

Work performance:

Outstanding – consistently achieves and/or exceeds company standard [15]
Exceeds objectives of the role [12]
Meets all role objectives [9]
Meets some role objectives [6]
Fails to meet any objectives of the role [3]

Skills and competence:

Multi-skilled, fully competent, and supports others regularly [15]
Fully competent within current role [12]
Competent in most aspects of their current role, requires some level of supervision [9]
Shows some competence within the role, requires regular guidance and supervision [6]
Cannot function within supervision or close support [3]

Disciplinary record:

Clean record – no disciplinary action [5]
Record of informal disciplinary action taken [4]
Current (active) verbal warning [3]
Current (active) written warning [2]
Current (active) final written warning [1]

Attendance record:

No recorded absences [5]
Some absences but below the average for selection of pool [4]
Attendance in line with general workplace (or selection pool) average [3]
Absence level above average for selection pool [2]
Unacceptable and high level of absence [1]

Getting it right – the importance of a fair and transparent process

Make sure that whoever is doing the scoring objectively assesses everyone against the criteria, does so fairly, by using direct knowledge of the individual in question together with using any staffing records. It is always better to get more than one person to do this, and then you will be confident any decision made is the right one for your business.

Consult with each employee individually who has been selected for redundancy on the basis of their scores. Give them a copy of their score and allow them the opportunity to comment on it and challenge the basis on which the score has been settled upon. You may also consider exploring the possibility of redeployment or other suitable alternative employment.

At the end of the scoring process, it is important to double-check all your calculations in order to remove accusations of personal bias. All score sheets should have clear guidance notes indicating which competencies are required for each particular score.

You should then confirm everything in writing to the selected employees, giving details of how the decision was made, their rights, and any process of appeal.

Risks for employers

If you operate a fair and open process when deciding who to select and then who to make redundant, you minimise the risk of ending up in an employment tribunal. But there are legal risks to take into account, and no matter how thorough or fair you are in your process, there is always the potential for a disgruntled employee to make a claim.

It is important to remember that redundancy is still a dismissal – which means if you don’t follow a fair procedure when establishing the redundancy selection pool and the procedure following on from that to make employees redundant, you may face a claim for unfair dismissal.

Also, if an employee demonstrates the dismissal was down to a “protected characteristic” (such as the employee’s age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief or sex), you could potentially face an unlimited tribunal awarded pay-out for discrimination.

Redundancy matrix FAQs

[wp-faq-schema accordion=1]

Legal disclaimer

The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.