Round #448

A manager wants to put just one employee at risk of redundancy rather than run a pool selection. In what circumstances is a pool of one lawful?

### When is a Pool of One Lawful in UK Redundancy Situations? In UK employment law (primarily governed by the Employment Rights Act 1996 and case law from employment tribunals and the Court of Appeal), redundancy selection must be fair and reasonable. This typically involves identifying a "pool" of employees whose roles are at risk and applying objective criteria (e.g., skills, length of service, disciplinary record) to select who is made redundant. However, a "pool of one"—where only a single employee is placed at risk without broader selection—is not inherently unlawful, but it is highly scrutinized. Tribunals will examine whether the process was genuinely fair and not a pretext for targeting an individual (e.g., due to discrimination, personality clashes, or poor performance mislabeled as redundancy). A pool of one can be lawful in specific circumstances, provided the employer can demonstrate that the decision was reasonable and followed a fair procedure (including consultation, consideration of alternatives to dismissal, and appeals). Below, I outline the key circumstances where this is permissible, based on established case law (e.g., *Capita Hartshead Ltd v Byard* [2012], *Fulcrum Pharma v Bonassera* [2009], and *Rowstock Ltd v Jessemey* [2013]). #### 1. **The Role is Unique or Non-Transferable** - **Circumstance**: The employee's position is genuinely unique within the organization, with no comparable roles or employees performing similar duties. For example: - A specialist role (e.g., a unique IT architect for a bespoke system) where no other staff have overlapping skills or responsibilities. - A small business where the employee is the sole occupant of a specific function (e.g., the only marketing director in a startup). - **Why Lawful?**: There's no need for a broader pool if no one else could reasonably be considered "at risk" because their roles differ significantly. Tribunals assess this objectively: Was the role truly distinct, or could it have been pooled with similar positions (e.g., other managers)? - **Evidence Required**: The employer must document why the role is unique (e.g., job descriptions, organizational charts) and show that redeployment or role absorption wasn't feasible. - **Risks if Unlawful**: If similar roles exist but are excluded (e.g., ignoring other department heads), it could be deemed unfair, leading to a successful unfair dismissal claim. #### 2. **The Redundancy is Specific to a Diminishing or Eliminated Function** - **Circumstance**: The redundancy arises from a targeted business change affecting only that employee's specific duties, such as: - Closure of a single department or project where the employee is the only one involved (e.g., the sole project manager for a now-canceled initiative). - Relocation of a unique operation (e.g., the only employee based at a remote site that's closing). - Reduction in a niche area (e.g., eliminating a single compliance role due to regulatory changes, with no equivalents elsewhere). - **Why Lawful?**: Case law (e.g., *Keller v MAE* [1996]) supports pools of one when the "at risk" criterion is tied to the specific reason for redundancy, not the employee's personal attributes. The employer must prove the function is genuinely ceasing or diminishing. - **Evidence Required**: Business justification (e.g., financial reports, restructuring plans) and proof that the role can't be redistributed without creating new redundancies. - **Risks if Unlawful**: If the "unique" label is artificial (e.g., redefining the role to isolate the employee), it may be seen as a sham, especially if the work continues via contractors or others. #### 3. **Small-Scale or Isolated Redundancy in a Small Organization** - **Circumstance**: In very small businesses (e.g., fewer than 20 employees), where pooling would be impractical or disproportionate. For instance: - A family-run firm making one person redundant due to overall downsizing, with no other similar roles. - An isolated case where the employee's contract or expertise makes them the only viable candidate (e.g., a long-serving employee with irreplaceable institutional knowledge, but whose function is being automated). - **Why Lawful?**: The "band of reasonable responses" test (from *British Home Stores v Burchell* [1978]) allows flexibility for smaller employers. Tribunals recognize that rigid pooling isn't always feasible in micro-businesses. - **Evidence Required**: Details of the business size, the redundancy rationale, and why alternatives (e.g., voluntary redundancy from a pool) weren't pursued. - **Risks if Unlawful**: Even in small firms, if discrimination is suspected (e.g., under the Equality Act 2010 for age, gender, etc.), a pool of one amplifies scrutiny. Always check for protected characteristics. #### General Requirements for Lawfulness Regardless of the circumstance, the employer must: - **Define Redundancy Clearly**: Confirm it meets the statutory definition (cessation/ diminution of work, relocation, or other business needs—s.139 Employment Rights Act 1996). - **Follow Fair Procedure**: - Individual consultation (at least one meeting, with feedback considered). - Explore alternatives (e.g., redeployment, reduced hours). - Provide selection criteria (even for a pool of one, explain why no others were included). - Offer notice, pay in lieu, and redundancy pay (if eligible: 2+ years' service). - Allow an appeal. - **Avoid Discrimination**: Pools of one are vulnerable to claims under the Equality Act 2010 if the selection appears biased (e.g., targeting older workers). - **Comply with Collective Rules**: If 20+ employees are at risk organization-wide, collective consultation (45/30 days' notice) may apply, but a true pool of one usually avoids this. - **Document Everything**: Tribunals (e.g., in *Vaughan v London Borough of Lewisham* [2013]) emphasize that lack of records can make even a justifiable pool of one unfair. #### When It's Unlawful - If used to mask performance management, capability issues, or personal grudges (redundancy can't substitute for disciplinary processes). - If comparable employees are deliberately excluded to "rig" the pool. - In larger organizations where pooling is standard practice but ignored without justification. #### Recommendations - **Seek Advice**: Consult an HR specialist, ACAS (Advisory, Conciliation and Arbitration Service), or employment lawyer before proceeding. ACAS guidelines on redundancy emphasize fairness. - **Tribunal Outcomes**: Successful unfair dismissal claims can result in compensation (up to ~£115,115 basic award + compensatory award, as of 2023) or reinstatement. - **Best Practice**: Even for a pool of one, consider inviting the employee to suggest if others should be included—this shows openness. If this relates to a specific scenario (e.g., industry or employee details), provide more context for tailored advice. Note: This is general guidance based on UK law as of my last update; laws evolve, so verify with current sources.

### When is a Pool of One Lawful in a Redundancy Process? In UK employment law, redundancy occurs when an employee's role is no longer needed for business reasons (e.g., restructuring, cost-cutting, or closure of a department). The standard process involves defining a "pool" of employees at risk, applying fair selection criteria (e.g., skills, performance, length of service), consulting with affected employees, and potentially making selections for dismissal. However, a manager may sometimes want to target just one employee without a broader pool. This is often called a "pool of one." A pool of one **can be lawful**, but it is highly scrutinized by employment tribunals to ensure fairness and prevent it from being a disguised unfair dismissal (e.g., targeting someone for poor performance or personal reasons rather than genuine redundancy). The key is that the process must remain objective, transparent, and justifiable. Below, I'll outline the circumstances where this is permissible, based on established case law and ACAS (Advisory, Conciliation and Arbitration Service) guidelines. #### Key Legal Principles - **Genuine Redundancy Requirement**: Under the Employment Rights Act 1996 (ERA), redundancy must be genuine. A pool of one is only valid if the role (or a specific part of it) is truly diminishing, and no other employees could reasonably be redeployed into it. - **Fairness Test**: Even with a pool of one, the dismissal must be fair under Section 98 of the ERA. Tribunals assess whether the employer acted reasonably, including proper consultation and consideration of alternatives. - **ACAS Code of Practice**: Employers should follow ACAS guidelines on redundancy handling, which emphasize fair pools but allow exceptions where justified. - **Case Law Guidance**: - **William Hill Organization Ltd v Tucker (1999)**: Confirmed that a pool of one can be fair if the employee's role is unique and cannot be absorbed by others. - **Capita Hartshead Ltd v Byard (2012)**: A pool of one was upheld where the role was specialized (e.g., a unique software specialist), and no other employees shared similar duties. - **Mündy v Care Principles Ltd (2017)**: Ruled unfair where a pool of one was used to target a specific employee without objective reasons, ignoring potential pooling with similar roles. - Tribunals often look for evidence that the employer considered a wider pool but reasonably concluded it wasn't applicable. If the process is unfair, the employee could claim **unfair dismissal** (potentially winning compensation up to £115,115 or 52 weeks' pay, whichever is lower, as of 2024). Eligible employees (2+ years' service) may also claim statutory redundancy pay. #### Circumstances Where a Pool of One is Lawful A pool of one is typically lawful in these scenarios, provided the employer documents their reasoning and follows procedural fairness: 1. **Unique or Specialized Role**: - The employee's job is distinct and not interchangeable with others. For example: - A sole IT specialist managing a proprietary system that no one else in the organization can handle. - A unique managerial position in a small team where the role's responsibilities don't overlap with subordinates or peers. - **Why Lawful?** There's no "pool" to draw from because no other employees perform substantially similar work. The employer must prove this (e.g., via job descriptions or organizational charts). - **Caveat**: If similar roles exist elsewhere (e.g., in another branch), the employer should consider pooling or redeployment. 2. **Specific Business or Structural Change Affecting Only One Position**: - The redundancy arises from a targeted change, like automating a single role or closing a specific project/client account. - Example: A company loses a major client, eliminating the account manager's role, but no other account managers handle similar clients. - **Why Lawful?** The diminution of work is isolated to that employee. This is common in small businesses or startups. - **Evidence Needed**: Show how the change directly impacts only that role (e.g., financial reports or restructuring plans). 3. **Temporary or Fixed-Term Role Ending Without Renewal**: - If the role was always project-based or maternity cover, and it naturally ends due to business needs. - Example: A temporary HR advisor hired for a merger, whose contract ends as the project concludes. - **Why Lawful?** No ongoing need exists, so no pool is required. However, if the employee has permanent status, full redundancy procedures apply. - **Note**: Fixed-term employees get similar protections under the ERA. 4. **Small Employer or Isolated Location**: - In very small teams (e.g., under 10 employees) or remote sites, where pooling isn't practical. - Example: A single shop assistant in a rural store closing, with no comparable roles nearby. - **Why Lawful?** Practicality justifies it, but the employer must still consult and explore redeployment (e.g., to other sites). #### Essential Steps to Ensure Lawfulness (Even with a Pool of One) To avoid challenges, the manager must: - **Define the Pool Justifiably**: Document why the pool is limited to one (e.g., in a redundancy risk assessment). Issue an "at-risk" letter explaining the reasons. - **Conduct Meaningful Consultation**: Meet individually with the employee (at least once, ideally more) to discuss the situation, explore alternatives (e.g., redeployment, reduced hours), and consider their input. Consultation should start before any decision. - **Apply Fair Selection Criteria**: Even in a pool of one, confirm no subjective bias. Use objective factors like business needs, not performance issues (which should be handled via capability procedures). - **Offer Alternatives**: Explore voluntary redundancy, training, or internal vacancies. Failure to do so can make the dismissal unfair. - **Provide Redundancy Pay and Notice**: If eligible (2+ years' service, aged 18-65), pay statutory redundancy (based on age, service, and weekly pay up to £700 cap). Give full notice or pay in lieu. - **Handle Collective Aspects if Applicable**: If 20+ redundancies in 90 days, collective consultation with reps/union is required—but a single redundancy doesn't trigger this. - **Seek HR/Legal Advice**: Involve HR early; document everything to defend against tribunal claims. #### When It's Unlawful - **Discriminatory or Targeted**: If used to sideline someone (e.g., due to age, gender, disability, or union activity), it could lead to discrimination claims under the Equality Act 2010. - **No Genuine Redundancy**: If the role is refilled soon after or work is redistributed without reduction. - **Inadequate Consultation**: Skipping or rushing talks (e.g., no real dialogue). - **Larger Organization Ignoring Broader Pool**: If similar roles exist but are excluded arbitrarily. #### Recommendations for the Manager - **Assess the Situation**: Review the full workforce to confirm no wider pool applies. Use tools like ACAS's redundancy toolkit. - **Communicate Transparently**: Explain the business reasons clearly to build trust and reduce resentment. - **If in Doubt, Widen the Pool**: It's safer to include potentially at-risk employees and use fair criteria—tribunals prefer this. - **Resources**: Consult ACAS (helpline: 0300 123 1100) or a solicitor. For templates (e.g., at-risk letters, consultation notes), see GOV.UK's redundancy guidance. If this is a specific scenario, provide more details (e.g., company size, role type) for tailored advice. Remember, this is general guidance—professional legal advice is recommended for your situation.