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A brief guide to making redundancies

Redundancies are hard for everyone concerned, but the law in this area is designed to soften the blow as much as possible and to ensure that the process is carried out fairly. Employment specialist, Susan Mayall, provides a brief guide to the main points to consider.

Whether you are making a group or only one employee redundant, you need to operate within an objective, non-discriminatory process that you can apply consistently across the organisation.

You must write to all employees affected by the potential redundancies, setting out the reasons for possible redundancy and inviting them to a meeting to discuss the proposed dismissals. Let them know that they are entitled to have a representative – a colleague or trade-union representative – with them at the meeting.

You may need to identify a pool of candidates for possible redundancy. If so, you should consider the make-up of the pool carefully to ensure it covers all the relevant workers. A skills matrix or other carefully chosen criterion should be formulated to select potentially redundant candidates from the pool, and the criteria must be applied in an objective and reasonable fashion.

For 20 or more redundancies, you must notify the Department for Business, Innovation and Skills and consult workplace representatives. You must also carry out a collective redundancy consultation.

Whether the consultations are with individuals, or collective, they give people the right to respond to the redundancy risk and the selection methods used. They may even result in ideas for how jobs can be preserved, so you must not go in with your mind made up. Ensure you consider any alternative employment.

If you fail to find alternatives to redundancy, write again to the employees affected, confirming your decision to make their position redundant.

Ensure they are fully informed of the reasons for your decision, and of thier right of appeal. Also confirm the amount of redundancy payment you owe and how you worked it out (the Department for Business has a free online tool for this). If you fail to make this payment, or offer the wrong amount, the employee can make a claim to an employment tribunal.

Do not expect to be able to dismiss employees immediately. You could walk into a minefield of costly and time-consuming problems if you fail to plan properly, in line with your legal obligations. Avoid the “last in first out” principle and be aware that part-time employees have the same statutory rights and protection as full-timers.

Finally, make sure you look after the employees who are staying, as well as those who are leaving. Avoid the drip-drip effect of bad news and be as positive with them as you reasonably can about the security of their own jobs.

Pearson Hinchliffe Commercial Law can help you with employment law, especially implementing redundancies.

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