Redundancy Procedures for Employers
As a result of the current global health crisis many business owners are forced to look at ways in which they can quickly reduce costs in order to survive this indefinite period where cashflow and operational activity is thrown into uncertainty. If you are currently considering making any of your staff redundant, we advise you to seek advice on the correct legal procedures and alternative options that may be available to you. Our employment solicitor Natalie Abbott is on hand to answer any of your questions and to provide advice on your situation, contact Natalie on email@example.com or 0115 910 6244.
Should an employee’s role no longer be required as a result of the business undergoing a restructure, relocation or a change in its operational activity; redundancies are sometimes necessary for the business to remain profitable and sustainable.
Having to make workplace redundancies is a difficult decision for any business owner to arrive at and it can have a huge impact on morale, it’s important that all other options are considered as part of this process and seeking legal advice can also help you review all of your options before making a final decision.
Where redundancies are required it’s important for your business to seek legal advice to ensure a genuine redundancy situation has arisen, that the correct legal guidelines are adhered to, and that the consultation process is procedurally fair. Making sure that you have the right legal advice at the start of the process will minimise possible repercussions such as employees seeking legal action for unfair dismissal or lodging an appeal.
How can Rotheras help your business if you are making redundancies?
We can provide pragmatic advise on the following areas:
- TUPE Redundancy and Restructuring
- Redundancy Consultation
- Redundancy Entitlement
- Voluntary Redundancy
- Compulsory Redundancy
- Employment Dispute Resolution
- Unfair Dismissal Claims
- Post-termination restrictions
- Settlement Agreements
- Redundancy Policies
Making a position redundant
You may decide to restructure your business for a variety of reasons, which may involve re-organising positions with a view to consolidating staff into fewer roles, creating redundancies in the process.
There are procedures and regulations in place that protect employees from being made redundant unnecessarily. Failure to adhere to these rules could bring your company name into disrepute and, result in your business being summoned to an employment tribunal.
Why choose Rotheras for redundancy advice?
Rotheras have been serving businesses and individuals for almost 200 years, we understand the nature of the commercial landscape is constantly changing and we seek to offer sound and proactive advice that will help your business thrive.
Our employment law team have experience working with both employees and employers, we provide straight-forward legal advice and we can help you regardless of what stage of the redundancy process your business is at, it’s never too early or too late to seek legal advice.
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There are a number of steps which should be followed prior to confirming that a role is redundant.
· Ascertain whether there is a genuine redundancy situation. For example, is there a closure of the business or of the employee’s workplace? Is there a diminished need for employees to carry out work of a particular kind?
· Consider the selection pool for redundancy and determine the selection criteria you will use. Are there any alternative vacancies available within the business?
· Meet with the “at risk employees” and confirm the information given at that meeting in writing.
· Score each potentially redundant employee against the selection criteria.
· Meet and consult with those employees who are provisionally selected for redundancy.
· Follow up and hold further meetings as necessary.
· Write to employees selected for redundancy confirming the dismissal and allowing for an appeal.
The above sets out those steps which may be required and does not deal with situations where 20 or more redundancies are proposed within a 90-day period, in which case collective consultation obligations will arise under TULRCA.
Disclaimer – outline only/not intended as legal advice
There are various alternatives that an employer may have to redundancy, including:
· Temporary stoppages, eg unpaid leave, holidays, lay-offs.
· Reducing hours eg short-time working, part-time and flexible working, stopping overtime.
· Reducing remuneration eg pay freezes, a reduction in pay or benefits, a review of bonuses or change to pension arrangements.
There are a number of legal and practical considerations to take into account before taking any such measures, all of which are likely to have an impact on morale and the image of the business. Unilateral implementation may breach contractual arrangements and the employees’ consent may be required. Collective information and consultation obligations may also be triggered.
A redundancy policy can provide a useful tool for both employers and employees to refer to in a redundancy situation. It gives an employer the opportunity to tell employees how it will address the need to reduce headcount, and what they can expect. It acts as a helpful prompt to employers to ensure they are following the correct procedure.
If you don’t have one our employment team are able to provide a policy tailored to your business. Equally they are on hand to talk you through the process each step of the way.
The main objective is to ensure that your decision is genuine and capable of objective justification.
It is useful to gather a pool of potential candidates who have similar or interchangeable roles, to consider for redundancy so that the decision can be made objectively and based on criteria that they can be measured against to make a fair and just decision. Criteria might include factors such as skills, experience, performance and HR records (disciplinary, performance reviews etc).
If you are inviting staff to apply for voluntary redundancy, then you may be able to make this decision without needing to pool.
Under 20 employees being made redundant: no minimum period for consultation applies, however, failure to consult with your employees over a reasonable period could result in claims of unfair dismissal.
If between 20 and 99 redundancies being made within the same time period there is a minimum obligation of 30 days to consult with employees
100+ employees the consultation period extends to 90 days.
An employee with at least two years’ continuous service is entitled to a statutory redundancy payment. This is in addition to any contractual redundancy payment that their employer may provide.
Statutory redundancy payments are subject to annual increases, and calculated based on length of service and age at the date of termination.
See GOV.UK for further information on statutory redundancy payments:
Employees who have their employment terminated without being given full notice will also be entitled to a payment in lieu of notice.
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