Tips for Getting Redundancies Right

| January 31, 2018

redundancyRedundancy consultations are one of the hardest things you’ll have to do, but you have to look after your business. The first thing you should do is to get advice from employment law and human resources experts like elliswhittam.

You can also follow these guidelines if you’re performing individual consultation redundancy processes, with fewer than 20 employees being made redundant in a 90-day period.

Make sure you have genuine reasons

You might think that making employees with poor track records redundant first will “save” “better” workers. However, this could lead to unfair dismissal proceedings as you need to meet the statutory definition of redundancy. Does your company genuinely have less need for this employee’s work? Does the company have to close a particular branch or department due to a lack of demand? If not, then that worker can’t be made redundant.

You must comply with policies and procedures

The policies and procedures must also be given to any potentially affected employees. For best practice, the ACAS redundancy guidance is useful.

You should create a selection pool

To identify the pool, you can look at any types of work that are less in demand or becoming obsolete. Of course, you may be able to transfer some employees to a new role, but any who can’t be transferred can still be considered for redundancy.

Don’t forget absent employees

Absent employees – on sick or maternity leave – can be included in the considerations. They should be treated the same way as present workers and consulted in person too. If they can be transferred to another role, then do this; the fact they’re on leave has no bearing on your selection.

Your selection criteria must be fair and objective

Personal opinions shouldn’t be used. The criteria must be objective and measurable and be drawn from HR records, appraisals, disciplinary records, performance and ability. Attendance records can also be used, but any absences relating to pregnancy-related illnesses, family-related leave and disabilities must be discounted.

You must consult fully and early

You should carry out meaningful consultations with pooled employees while the process is at the formative stage. This is important to the fairness of the process and gives employees enough time and information so that they can respond to the proposals.

Look for alternative employment

You must look for alternative roles for affected employees; invite them to apply and use your normal selection process. If an employee is on maternity or adoption leave then they may be offered these vacancies. If you don’t try to find an alternative role, then the dismissal may be deemed unfair.

Offer time off to look for work

Once an employee has been given notice of redundancy, they have the right to take time off for job-hunting or to arrange training (if they have two years of continuous service). Some of this leave may be paid.

Make sure statutory and contractual payments are right

You must ensure that all the employee’s contractual rights are fulfilled, especially notice periods, bonus entitlements, holiday entitlement and any other benefits. It’s vital that you work out the right statutory redundancy payment, as well as any company enhancements. Don’t forget about the tax deductions either, and make sure that the calculations are applied consistently so no-one feels discriminated against.

Think about a settlement payment

Redundancies are always hard and many companies offer their employees ex gratia payments on top of statutory and company redundancy settlements. It can be a goodwill gesture and also a way to avoid future legal action; these settlements are often worth the expense.

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