In a tough economic environment employers may conclude they need to reduce headcount and make some redundancies.
If that’s the case, there’s a statutory process to follow before making people redundant. It’s important to get the process right to avoid unnecessary disputes or Employment Tribunal claims for unfair dismissal.
Here are some key points to remember if you think you need to make redundancies.
Make sure it’s a genuine redundancy
Redundancy is about the role, not the person. The redundancy process should never be used to dismiss a specific employee in place of performance management and a disciplinary process. A redundancy is only genuine if it fits within one of the following descriptions:
- the employer ceases to carry on the business in which the employee was employed,
- the employer ceases to carry on that business in the place where the employee was employed,
- the needs of the business for employees to carry out work of a particular kind cease or diminish, or
- the needs of the business for employees to carry out work of a particular kind in the place where the employee was employed cease or diminish.
Preparation is key
Once you have established the reason for the redundancy of a role, prepare some notes for the consultation process. These notes should include key information you need to communicate:
- why you need to make redundancies,
- which jobs are at risk,
- how employees will be selected for redundancy,
- the number of people who could be involved,
- how you plan to carry out redundancies,
- how redundancy pay will be calculated and
- details of any agency workers at the company
Fulfil your obligations
Establish the timeframes within which you need to consult and whether you need to consult a trade union, or elected representatives. If you plan to make more than 20 people redundant within 90 days you will need to do collective consultation, so it’s important to know your obligations.
Plan for the process
Prepare your notes and make sure you know the timeframes and consultation requirements. It can then be helpful to create a communication plan for the consultation process. The plan should include details of the consultation with potentially redundant employees as well as other team members who may be affected by the changes.
When the consultation is complete, a redundancy can be confirmed. True consultation involves listening to alternative ideas to avoid redundancies, considering any contractor or agency worker roles instead and redeployment opportunities within the company. It’s also important to ensure the affected employees fully understand the reasons for the consultation and what it means for them specifically. Prior to consultation being completed any redundancy plans should be presented as proposals, subject to consultation.
If you’re making large-scale redundancies, it can result in a long and complex process, but whether it affects one employee or 50, it’s still important to get it right and consider their rights and how the news will affect them. Good planning and communication is key.
We work with businesses during difficult times and help to take away the worries about getting it wrong, so if you’re business needs to make these difficult decisions, get in touch with Helpful HR.