Redundancies

Redundancy is a form of dismissal when a role is no longer needed. This could be because a business is closing, needs to reduce the sizeof their workforce or change the location of a role or workforce. It’s important to note that redundancy should not be used for another dismissal reason such as performance or conduct – there are different procedures to follow for these types of dismissals.

What is the redundancy process?

Firstly, the business will need to enter a planning stage, to prepare accurate and justifiable evidence that there is a genuine need for a redundancy situation. A good way of doing this formally is to prepare a business case – this will start the paper trail for the process. It’s recommended that employees are provided with a copy of the business case. The planning stage is also a good time to prepare a timetable of events (beware that this will vary for businesses depending on the size of redundancy), check employment contracts and collate data such as length of service, notice periods etc. You will want to engage your legal team at this stage who can prepare draft documentation, scripts etc for you.

Following this, the consultation process can begin. These are essentially two-way meetings with affected employees to give them a fair and proper opportunity to understand why the business is considering redundancies, why their role is at risk and what process they will need to follow. It’s also an opportunity for them to respond to the businesses case and make any suggestions which could enable to the business to avoid dismissals (or at least reduce the number of redundancies) or to mitigate the consequences of dismissal on those affected.

There will generally be a meeting (which can be informal) to inform an employee of the redundancy justification. This can be held as a business or with individuals. Individual consultation will the begin with an ‘at-risk’ meeting, followed by a second meeting and then the third meeting will be the final consultation. It’s important that no decisions on redundancy are made prior to the completion of these consultations.

You will need to prepare a selection criteria to assist with the decision-making in instances where redundancies cannot be avoided. You will also need to be aware of redundancy payment entitlement, depending on length of service.

How can I avoid redundancy?

Redundancy is a very distressing and stress-inducing time for all those involved, so where possible, it’s advised to consider alternatives. Some popular solutions include: a reduction of sub-contracting, temporary lay-offs/short-working, wage freezes, salary/bonus/pension reductions, sales of unprofitable parts of a business, recruitment freezes, bans to ad-hoc overtime, voluntary pay reductions or shorter working hours and reducing supplier costs.

The risk of not following a proper redundancy process?

Unfair dismissal is the first legal risk that springs to mind as a result of poorly followed (or lack of) redundancy process. This could be because the redundancy wasn’t legitimate, the employee wasn’t compensated correctly, employers failed to consult or there was an unfair selection – just to name a few!

If redundancies are not handled appropriately and with compassion and transparency, it can have a detrimental affect on your remaining team. This can lead to unwanted resignations, reduced morale and output etc.

How can we help?

We’ve seen the impact that a poorly managed redundancy situation can have on businesses and therefore we understand the importance of getting things right, first-time round. We’re Employment Law experts so we know exactly how to run a tight-ship redundancy processes which will help you avoid the legal risks that redundancies carry.

Need a UK Employment Lawyer to manage your redundancy or restructure process? Get in touch with the team.

How to get started

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