Redundancy continues to be one of the most misunderstood processes within people management and employment law. Too often, employers think they can turn to redundancy as a shortcut for dismissing underperforming staff; usually because they have failed to deal with the underperformance in a structured way and it has now reached a point that is intolerable.

In reality, redundancy is about eliminating a role, not an individual. While redundancy can be an effective tool in situations where roles are genuinely no longer required, it is not appropriate for managing individual performance. Misusing redundancy to bypass proper performance management procedures is not only unfair to the employee but also exposes the business to legal risks, as well as reputational damage.

Redundancy is defined as a situation where an employer no longer needs work of a particular kind to be done or no longer needs it to be done at the location where employees are based. Importantly, redundancy relates to the role itself, not to the person in that role. For example, if a company reorganises and no longer requires a particular function, the role becomes redundant. However, the employee's individual performance has no bearing on whether redundancy is appropriate.

Using redundancy to remove a single underperforming employee by claiming their role is no longer needed is a surprisingly common mistake that employers make. If only one person is placed in a selection pool, especially where others in the organisation do the same or similar work, this can raise suspicions of foul play. Employment tribunals are likely to question whether the redundancy was genuine or simply a mechanism to sidestep dealing with the employee’s performance issues.

To be clear, if there are multiple employees that fulfil the redundant role, or a role similar to the redundant one, it is necessary to create a selection pool. This pool should include all employees performing similar roles either in the same location or other sites around the country, An objective selection process should then be followed. Failing to establish a selection pool, or creating a "pool of one" to target a specific employee, is a red flag.

When we at HR Champions are asked to support with redundancy and we are presented with a pool of one, we will always be sceptical. In order to protect our clients we must see cases and situations from the point of view of an employment tribunal, and a tribunal judge will always be suspicious of a pool of one.

The risks of a ‘pool of one’ include claims of unfair dismissal, potential tribunal costs, and reputational damage to the business. If the redundancy is seen as a smokescreen to remove an employee for performance-related reasons, the employer can face significant financial and legal consequences. Furthermore, this approach can damage trust within the workforce, leading to a decline in morale and productivity among remaining staff.

The key to avoiding using redundancy inappropriately starts with an objective look at why the organisation wants to part company with a particular individual. Ask yourself, “is the person, or is it the function?” If it is the former, then we should really be looking at alternatives.

If the problem is actually the underperformance of an individual, then we should be implementing robust performance processes.

Underperformance should be managed through formal procedures that include setting clear goals and expectations, providing feedback, and offering opportunities for improvement. If an employee continues to underperform, employers can follow a structured disciplinary procedure, which may eventually lead to dismissal if there is no improvement.

To make this fully effective, managers need to undergo the appropriate training to ensure they are both effective and consistent. They also need the time and space to manage their teams and implement the training. Too often, managers are overstretched, and performance management becomes reactive rather than proactive. Investing in management training, like our ILM courses, ensures that underperformance is identified and addressed early, reducing the likelihood of reaching a point where redundancy is even contemplated as a solution.

To re-cap; redundancy is a legitimate tool for businesses when a genuine business need arises, but it must not be misused as a way of dismissing underperforming staff. The risks of legal action and damage to company reputation are too high. Instead, underperformance should be managed through proper procedures, and managers must be equipped with the training and resources necessary to handle these situations effectively. By taking a proactive approach to performance management, businesses can avoid the pitfalls of redundancy misuse and maintain a fair, legally compliant workplace.

For support and advice with any employee related matters call us on 01452 331331 or contact us through our contact page.