Redundancy: What you need to consider

This one is never an easy subject to discuss, but sadly sometimes it’s necessary.

One of the many consequences of the coronavirus (COVID-19) pandemic is that many organisations have been faced with making redundancies.

No employer will find the experience of making employees redundant easy or pleasant. However, where redundancies are necessary, following good principles of redundancy management will help protect against tribunal claims as well as minimising the stress for departing employees and the potentially negative impact on redundancy survivors’ morale.

These include ensuring that a proper consultation exercise is carried out as early as practicable, and that fair and consistent selection criteria are applied.

But many employers unfortunately get it wrong when they try to handle the redundancy process on their own. We often see things begin at the consultation process (where the tricky business of deciding who goes begins). However, before you get to this point, there are a few things you must do to make sure you’re making the right decisions and following the correct process.

Key steps

  • Identify which employees are affected and determine the redundancy selection pool
  • Determine the redundancy selection criteria
  • Ascertain if collective redundancy consultation is necessary
  • Hold individual redundancy consultation meetings
  • Calculate the redundant employees’ redundancy pay

Before you decide that redundancies are definitely necessary, you should consider alternative options, such as moving staff to other roles, changing working hours, reducing overtime, or dismissing temporary workers.

You may also consider offering voluntary redundancy, which may be an attractive offer to those who’ve been with the company for a long time, or who are nearing retirement anyway. Though in this case it’s important to avoid discrimination by offering it out widely, and not putting any pressure on your people to take it up.

Once you’ve reached the decision to make redundancies, it’s a good idea to make a redundancy plan. This should include all the options you’ve considered, the number of redundancies you need to make, how you will support staff through the process, and the timeframes you wish to stick to. You should also include selection criteria, redundancy pay and notice periods, and how the appeal process will be handled.

You must then inform everyone of your plans. For any employees at risk of redundancy, you should also confirm your plans in writing, including the risk to that employee, their options, and your consultation plans.

Only then can you begin the consultation process.

If you are considering making redundancies, we would strongly advise you seek expert advice. Although it seems like an additional expense at a time that you don’t really need it, the likelihood of it saving you a lot of stress and even keeping you away from tribunals is high.

As always, we’re here if you need help or advice. Just give us a call.

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