A redundancy process can be a challenging and sensitive situation for both employers and employees. It’s essential to follow legal and ethical guidelines throughout the process to ensure fairness and compliance.
A redundancy process can be a challenging and sensitive situation for both employers and employees. It’s essential to follow legal and ethical guidelines throughout the process to ensure fairness and compliance.
We’re often asked to help with redundancies, but we find that there are some blurred lines on what people perceive to be a redundancy. Let’s outline that for you – an employee is dismissed for redundancy when the dismissal is due to a legitimate business reason, such as:
- a downturn in business
- the business moves
- technological changes
- restructuring
- the business is transferred to another employer (that’s potentially a whole different story – think TUPE!).
We’re often asked to help with redundancies, but we find that there are some blurred lines on what people perceive to be a redundancy. Let’s outline that for you – an employee is dismissed for redundancy when the dismissal is due to a legitimate business reason, such as:
- a downturn in business
- the business moves
- technological changes
- restructuring
- the business is transferred to another employer (that’s potentially a whole different story – think TUPE!).
Before you take any steps to place anyone at risk of redundancy, you will need to write a business case which outlines the background information, the current situation, what the legitimate reasons for placing a role (or roles) at risk of redundancy and your proposal. The length of time to carry out a redundancy process will be dependent on how many roles are placed at risk over a certain time period. If it is between 20 and 99 redundancies, the consultation must start at least 30 days before any dismissals take effect. This period increases to at least 45 days if it is more than 100.
You will need to make an announcement to those affected by your proposed course of action, then you should consult individually (or collectively, depending on the number of roles affected). There may need to be a selection criterion applied if there are proposed remaining roles. Have you also considered the cost of redundancy – do you have a policy which states you will enhance redundancy? Have you factored in the notice pay and outstanding holiday?
Before you take any steps to place anyone at risk of redundancy, you will need to write a business case which outlines the background information, the current situation, what the legitimate reasons for placing a role (or roles) at risk of redundancy and your proposal. The length of time to carry out a redundancy process will be dependent on how many roles are placed at risk over a certain time period. If it is between 20 and 99 redundancies, the consultation must start at least 30 days before any dismissals take effect. This period increases to at least 45 days if it is more than 100.
You will need to make an announcement to those affected by your proposed course of action, then you should consult individually (or collectively, depending on the number of roles affected). There may need to be a selection criterion applied if there are proposed remaining roles. Have you also considered the cost of redundancy – do you have a policy which states you will enhance redundancy? Have you factored in the notice pay and outstanding holiday?
Consultation is key and it should be evident that it is an effective process. Make sure you listen to any ideas or recommendations that your employees may put forward, before you make any final decision.
Employees cannot be selected because of age, gender, or if they’re disabled or pregnant, on maternity leave adoption leave or shared parental leave. If they are, this could be classed as an unfair dismissal.
Consultation is key and it should be evident that it is an effective process. Make sure you listen to any ideas or recommendations that your employees may put forward, before you make any final decision.
Employees cannot be selected because of age, gender, or if they’re disabled or pregnant, on maternity leave adoption leave or shared parental leave. If they are, this could be classed as an unfair dismissal.
There are five main stages to consider during the redundancy process:
- Stage 1: Preparation.
Identifying the legitimate business reason for the redundancy. Be aware of any collective bargaining agreements, and company policies related to redundancy.
- Stage 2: Selection.
Develop fair and objective criteria for selecting employees for redundancy. Common criteria may include skills, performance, attendance, and length of service. Avoid discrimination based on age, gender, race, disability, or other protected characteristics.
- Stage 3: Individual Consultation.
Engage in meaningful consultation with affected employees and their representatives (if applicable) as early as possible. Share the reasons for redundancy, the selection criteria, and potential alternatives. Conduct redundancy meetings with affected employees in a private and compassionate manner.
Stage 4: Notice of Redundancy and Appeals.
Provide written notice to affected employees, specifying the reasons for redundancy, the selection criteria, and the termination date. Offer support and assistance in finding new employment opportunities or retraining. Establish your appeals process to allow employees to challenge the redundancy decision if they believe it’s unfair or discriminatory.
- Stage 5: The Termination Process.
After the redundancy process is complete, issue termination letters and process final payments, including redundancy packages. Allow affected employees to work their notice periods or provide payment in lieu of notice, as required by their contract.
There are five main stages to consider during the redundancy process:
- Stage 1: Preparation.
Identifying the legitimate business reason for the redundancy. Be aware of any collective bargaining agreements, and company policies related to redundancy.
- Stage 2: Selection.
Develop fair and objective criteria for selecting employees for redundancy. Common criteria may include skills, performance, attendance, and length of service. Avoid discrimination based on age, gender, race, disability, or other protected characteristics.
- Stage 3: Individual Consultation.
Engage in meaningful consultation with affected employees and their representatives (if applicable) as early as possible. Share the reasons for redundancy, the selection criteria, and potential alternatives. Conduct redundancy meetings with affected employees in a private and compassionate manner.
Stage 4: Notice of Redundancy and Appeals.
Provide written notice to affected employees, specifying the reasons for redundancy, the selection criteria, and the termination date. Offer support and assistance in finding new employment opportunities or retraining. Establish your appeals process to allow employees to challenge the redundancy decision if they believe it’s unfair or discriminatory.
- Stage 5: The Termination Process.
After the redundancy process is complete, issue termination letters and process final payments, including redundancy packages. Allow affected employees to work their notice periods or provide payment in lieu of notice, as required by their contract.
There’s a lot to think about and it can be costly if you get it wrong. Let us help you navigate a difficult situation and ensure you get it right, for you and your employees.
If you need some people advice on redundancies, get in touch with us!
There’s a lot to think about and it can be costly if you get it wrong. Let us help you navigate a difficult situation and ensure you get it right, for you and your employees.
There’s a lot to think about and it can be costly if you get it wrong. Let us help you navigate a difficult situation and ensure you get it right, for you and your employees.
If you need some people advice on redundancies, get in touch with us!
