Redundancy Selection Criteria: How to Choose Fair and Legally Sound Processes
In the first part of this blog series, I explained why I began writing about employment termination and redundancy. I introduced the SARAH model as a practical framework to process the emotional impact of unexpected job loss. I also highlighted how too often, sadly employers still fail in one of the most basic managerial duties: clear and timely communication.
This second article focuses on employers and managers. Specifically:
- How to choose fair redundancy selection criteria
- How COVID-19 has accelerated global alignment of redundancy laws
- Why performance-based selection often causes legal disputes
- What leaders must understand to avoid costly employment tribunal cases
- What to consider if and when AI changes roles and expectations to the extent that job losses are a business reality
If you are responsible for people, this is essential knowledge.
“Why Me?” The Perception of Unfair Redundancy
After the initial shock of being made redundant, most employees process the situation through the lens of fairness.
“I am a strong performer.”
“I always hit my targets.”
“Why was I selected?”
The uncomfortable truth is that in large-scale downsizing or restructuring, many high-performing employees lose their roles, especially at times of extreme changes such as COVID-19 or now, the changes that the AI transformation brings. Redundancy is often driven by financial necessity, mergers, automation or organisational redesign – not individual failure. World changes impact jobs.
In some countries, employment law clearly regulates redundancy selection processes. Where legal frameworks are strong and well-defined, the process is more predictable and defensible.
However, in many jurisdictions, employers retain significant discretion in defining selection criteria. This is where fairness, documentation and consistency become critical.
Common Redundancy Selection Criteria
Across different countries and industries, the most common redundancy selection criteria include:
- Length of service (Last in, first out)
Selection based on tenure rather than performance. This approach is objective and easier to defend legally. - Early retirement options
Often used as a voluntary mechanism to reduce workforce size before compulsory redundancies. - Position elimination
Entire roles are removed due to restructuring or due to AI driven automatisation of jobs - Duplicate role removal
When departments merge, a secondary selection process determines who remains. - Performance-based criteria
Employees with lower documented performance ratings are selected. - Salary cost criteria
Higher cost roles are targeted for financial savings. - Expat versus local prioritisation
In some regions, localisation policies or legal requirements prioritise local employees.
Before any internal employee selection begins, consultants, contractors and temporary workers should normally be reviewed first. Retaining external contractors while making permanent staff redundant creates immediate reputational and legal risk unless there is clear business justification.
COVID-19 and the Global Alignment of Redundancy Laws
COVID-19 accelerated regulatory development across many countries. Jurisdictions that previously lacked clear redundancy legislation were forced to introduce formal legal frameworks rapidly.
At the same time, many Western countries temporarily amended furlough and redundancy regulations to enable faster restructuring.
The result? A stronger global alignment of redundancy process expectations.
Also, as a result of COVID-19 and the economic impact of the war in Ukraine, several markets, particularly in the Nordics and Central Europe, have seen national employment laws become more flexible regarding termination criteria. In practice, this has made it easier for companies to termination employment contracts.
Employee expectations around fairness, consultation, documentation and transparency are now more universal than ever. Even where legal differences remain – particularly regarding notice periods and redundancy compensation – the guiding principles are increasingly similar.
Understanding these principles is no longer optional for leaders.
Redundancy Selection Criteria Most Likely to Cause Legal Disputes
The most common reason redundancy processes are challenged and employers find them selves in legal disputes with previous employees is simple:
- The employer fails to follow its own policies, or
- The employer fails to follow legal requirements.
If correct process is applied inconsistently, even in a single case, the entire redundancy exercise may be ruled invalid. Reinstatement orders and financial compensation can and will follow. The reputational damage is often far greater than the financial cost. The impact on employer image will take years to re-build.
But beyond procedural errors, certain selection criteria carry higher legal risk.
Performance-Based Selection – High Risk Without Documentation
Performance-based redundancy selection is the most frequently challenged criterion.
Why?
Because the burden of proof is always on the employer.
If performance ratings are used to determine who leaves, the organisation must demonstrate:
- Consistent and documented performance evaluations
- Objective criteria
- Comparable assessment periods
- No discrimination or bias
In organisations where performance reviews are poorly documented, inflated or inconsistently applied, performance-based selection becomes legally vulnerable.
It is surprisingly common for managers to rate all team members as “good” to avoid conflict or to secure equal salary increases. While this may feel fair in the short term, it destroys the integrity of both performance management and redundancy defensibility.
If salary reviews and performance ratings are directly linked without calibration, rating inflation becomes structurally embedded and is a significant risk to the company. Social governance fails and in EU for example, the legal implications of EU Equal Pay Act sanctions become a real business risk.
When redundancies arise and everyone has identical ratings, objective selection becomes nearly impossible.
The Importance of Calibration and Leadership Competence
One of the most significant managerial responsibilities is the ability to give honest, constructive feedback and conduct fair performance evaluations.
Failure to do so is not a minor issue. It is a leadership competence gap.
If you suspect rating inflation or inconsistent evaluations in your organisation, consider:
- Implementing a formal calibration process ( In my opinion, this is a must and the most important role HR takes as part of the performance and salary review process in any company.)
- Introducing second-level review of performance ratings
- Auditing the performance management framework
- Evaluating leadership development effectiveness
Without credible performance management, performance-based redundancy criteria should not be used. Not should it be used as a bases for merit salary increases.
Selection Criteria That Create the Least Conflict
The redundancy method that generates the fewest tribunal cases is voluntary redundancy.
Where financially viable, inviting volunteers reduces perceptions of unfairness and legal risk. However, voluntary redundancy does not always deliver required savings or support structural redesign.
Legal and Ethical Expectations Are Now Global
Although compensation models and notice periods remain country-specific, the expectations around fairness, transparency and documentation have become largely universal.
Understanding redundancy law, fair selection criteria and proper consultation processes is good for business.
It protects:
- Employer brand
- Leadership credibility
- Financial stability
- Organisational trust
Even if a leader chooses to take risk, it should be an informed decision never an accidental compliance failure. In business risks are needed, but they should be conscious decisions.
If You Have Been Made Redundant
If you do not know the reason for your redundancy or the criteria used, ask.
In most countries, employers are legally required to provide written explanation of the redundancy reason and selection process.
Clarity matters.
In the Final Part of This Series
The third article will move beyond redundancy and explore managerial contract terminations, executive exits, and the realities of senior leadership dismissal.
If this article raises questions about redundancy processes or leadership responsibility in restructuring, I welcome the discussion. I also help and advice companies in redundancy negotiations and building effective, automated and calibrated performance evaluation processes.
