Redundancy - A Guide For Employers .......

Redundancy - A guide for employers ……..

As is often the case with employment law, clear and early communication will be key to helping employers do the right thing, reduce the risk of complaints, and treat staff consistently and fairly.

Here are some key factors employers contemplating redundancies should consider.

Is there a redundancy situation?

Redundancy has a specific statutory definition. Under section 139 of the Employment Rights Act, companies should avoid ending employment for redundancy unless that is the true reason for dismissal; ie, there should be a reduction or envisaged reduction in work of a particular kind and, after due consultation, no alternatives to dismissal are available.

Consider alternatives to compulsory redundancy

It is important to consider alternatives to compulsory redundancy. This might include inviting staff to consider temporary or permanent pay cuts, job sharing arrangements or shorter working weeks/reduced hours. Employers should also, where viable, consider inviting volunteers for redundancy. You should clearly state that you retain the option to decline certain applications, especially in situations where the number of applications received exceeds the number of available roles at risk. This will help prevent the loss of key employees or the departure of too many individuals from the business.

Keeping open communication with employees and being transparent about the challenges facing the business can encourage a collective dialogue. This can also help find workable solutions that protect jobs. Inviting employees’ views and ideas may help save jobs and make for a more engaged, productive workforce going forwards.

Define the employees considered for redundancy

Before initiating a redundancy process, employers should carefully consider how they define the employees who may be at risk. This should include all employees who undertake similar work where there is an identified reduction in the needs of the business for that work of a particular kind. If there is any uncertainty about the considered employees, it is wise to seek legal advice. Getting it wrong can render the process unfair and leave the business vulnerable to costly tribunal claims and complaints.

Carry out a fair selection procedure

The selection process for redundancy should be fair and transparent, using consistent and, where possible, objective criteria. Employers may establish their own selection criteria, as long as they are reasonable and in line with what a typical employer would agree upon. As part of any consultation process, you should consider inviting staff views on the proposed criteria and seek buy-in where you can.

Standard criteria might include qualifications and skills, disciplinary records and attendance, performance, length of service and flexibility. However, what is appropriate will vary from one business to another and may depend on the circumstances.

It is important to avoid any potentially discriminatory factors in the selection process. These may include indirectly discriminatory criteria because they put someone with a particular protected characteristic at a disadvantage.

Consider the offer of suitable alternative employment

If there is a vacancy following the selection of an employee for redundancy then, as an employer, you have a duty to consider if it is suitable to offer as an alternative to dismissal. If the employee is on maternity leave or shared parental leave, then special rules apply and legal advice should be sought.

Inform and consult with employees

It is important to consult with employees early in the process, explaining the reasons for the proposals, the proposed selection process and those at risk. After the consultation, if no suitable alternatives are found, the company should invite the employee to a final meeting to confirm the outcome of the redundancy.

Businesses should be mindful of their legal obligations throughout the redundancy process and seek legal advice if necessary. They need to be aware of the rules and regulations when dealing with redundancies.

Undertake a collective consultation properly and fairly

Where 20 or more redundancies are contemplated within a 90-day period at one establishment, special rules apply, including requiring employers to consult with elected representatives. Failure to follow the rules can result in significant penalties, including a protective award of up to 90 days uncapped pay for each dismissed employee.

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Whether your business is responding to an economic downturn, a re-alignment of staff or a strategic response, these difficult decisions are fraught with legal and at times emotional decisions.

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(Source - Robert Whitaker outlines what businesses should consider when faced with the prospect of making job cuts Robert Whitaker is an executive partner and head of employment law at Tees Law)