‘Redundancy’ is a pretty scary word in the world of business. Redundancy occurs when an employee’s job no longer exists. There are many reasons behind redundancy, including an immediate need to reduce staff to keep the business from closing, or if the job role is no longer required.
It is vital that you have a sound and demonstrable business reason for considering redundancies. If this can’t be demonstrated, you may find yourself at the centre of an employment tribunal claim. Without the correct reasoning behind your dismissals, you risk facing accusations of a sham redundancy. We would urge you to always seek advice before beginning a redundancy process.
While it is considered more complex to make redundancies of 20 or more employees, and despite the fact there are no set rules to follow when making fewer than 20 employees redundant, it’s still good practice to follow the correct redundancy process. This will protect the interests of your business and ensure your employees are treated lawfully. Should you fail to adhere to the process, the employee could make a claim for unfair dismissal.
Once you are happy that redundancy is the way to go, the first step is commencing consultations. When dealing with fewer than 20 individuals, there is no minimum time for a consultation to occur before the first redundancies are made but it must be considered ‘meaningful’. When considering when to start the process, ensure that there will be sufficient time for the employees to consider all the information that you give them and pose any questions they might have. Let them know how long they have to do this.
The consultation must be carried out with a view to reaching an agreement and discussing ways in which redundancies could be avoided or reduced. The consultation can be carried out on a one-to-one basis or collectively. However you choose to carry out the consultation, it is important that you discuss the following points:
- Why you need to make redundancies
- The number of employees and which jobs are at risk
- How you will select employees for redundancy
- How you plan to carry out the redundancies, including timeframes
- How you will calculate redundancy pay
- If you’re using agency workers, how many, where they’re working and the type of work they’re doing
Who qualifies for what?
Redundancy notice periods and payments are all dependent on the time the employees have worked for your company. For instance, the statutory notice periods are:
- A minimum of one week – for staff who have been employed between one month and two years.
- One week of notice for each year of employment – for those who have been employed at your company between two and 12 years.
- 12 weeks of notice – if a staff member has been employed for 12 or more years.
If the employee has been with you for at least two years, they are entitled to receive a statutory redundancy payment. You will find a calculator for their entitlement at: http://www.gov.uk/calculate-your-redundancy-pay
Provision of Support
Staff will have lots of questions about what is happening – it’s important that the person telling them they’re being made redundant fully understands the plans. This will help manage difficult conversations.
Handling the situation sensitively can make a big difference to how staff react and cope with being made redundant and the morale of remaining staff.
Should you have any queries about redundancies, please email email@example.com and we will be happy to help.