Making employees redundant can be a daunting process but following some basic guidelines can help you to avoid some of the pitfalls.
The first thing to be clear on, and this is something that is commonly misunderstood, is that it is not advisable to have a fixed idea on who to pick out of a team to make them redundant. Employees chosen in this way could potentially claim unfair dismissal or discrimination.
Your choices need to be justified and if you have a pool of employees at risk of redundancy they need to be assessed against measurable and non-discriminatory criteria.
Are redundancies the only option?
Before you start the redundancy process, take time to consider if there are other options. Can you redeploy potentially redundant people into other roles? Do you want to offer voluntary redundancy? Does anyone in the team want to reduce their hours? Do you have contractors you can lay-off? Can you reduce or ban overtime? Can you temporarily lay-off employees? Can you offer early retirement?
The basic process
After identifying a pool of employees who do the same role and are at risk of redundancy they should be selected using criteria usually based on skills, qualifications and aptitude, standard of work, performance, attendance (not related to a disability) and disciplinary record.
You must consult with the affected employees and this normally entails a general announcement followed by individual consultation meetings. Where a union is recognised they would be informed.
If, following consultation, redundancy cannot be avoided then a termination notice should be provided detailing any redundancy pay due, the termination date, the length of the notice period and when it starts, any pay in lieu of notice, outstanding holiday pay or the requirement to take holiday before leaving and what happens to any other contractual benefits.
If you are paying statutory redundancy pay then only employees with over 2 years’ service will be eligible. How much an employee is entitled to will also depend on their age.
It is important to keep communication with your staff open during a redundancy process. There are always situations where this process is taken badly by employees, which isn’t surprising. Some employees will be happy to take voluntary redundancy or to take early retirement, however. There can be an unpleasant atmosphere in workplaces where redundancies are happening plus resentment but stopping communication will not help the situation.
We would recommend consulting whatever the number of affected employees. Consultation should be carried out with a view to hearing ideas and suggestions for reducing or avoiding redundancies and should be meaningful. A redundancy consultation should involve at least 2 consultation meetings.
During the consultation period consider whether you can offer alternative work. Employees would be able to trial the role for 4 weeks and if it doesn’t work out, they can still be made redundant.
If you only have one redundant role then selection criteria are not necessary but you should still consult with the employee affected.
If you are making more than 20 people redundant you may need to consult collectively and this would necessitate involving union or workplace representatives.
If you make an employee redundant they will have the right to appeal against the dismissal and details of who to appeal to should be outlined in the termination notice.
When to ask for help
We have outlined the very basics of the redundancy process here and you should seek advice from HR Think for guidance with the process. There are a number of potential pitfalls in the redundancy process and we can help to avoid risks and expensive mistakes.
The redundancy process can seem overwhelming and we are happy to help guide you through the process. Contact Liz Jewer on 07803 007591.