You will be seeing that we have been throwing a few different ramblings your way recently. Well with our next event fast approaching – (15th March- make sure it’s in your diary)- and it being about making and managing redundancies we thought it only right to do a little introduction to it by dropping another one of our little knowledge snap shots.
When it comes to the word redundancy, I feel that it is only natural that as an employer the actual thought of running through such a process can send a shiver up your spine. The process of redundancy can be very daunting and one that many employers can get hugely wrong. However, with the right plan and process in place, it really can go ok- really, I promise!
Below we have set out a bit of a cheat sheet outlining some of the key things you need to be thinking of:
1. What do we mean when we say redundancy?
s.139 Employment Rights Act 1996 states that a redundancy situation will arise where there is:
• Business closure
• Workplace closure
• A reduced requirement for roles of a particular kind
2. Consider whether you can avoid the need for redundancies.
• Restrict recruitment- cost effective way to reduce costs. If you have already recruited, then can those job offers be withdrawn?
• Reduce the number of agency staff- this will bring down costs internally. Agency staff are not technically employees, so the legal risk in ceasing to use them is much lower.
• Temporary stoppages- if there are reduced work levels you could adopt temporary stoppages. Some employers have contracts in place that allow for temporary ‘lay offs’ which allow for employees to remain employed whilst reducing staffing costs
• Reduce hours- similar to above, some employers have contracts in place allowing them to put their employees on short-time working.
• Reduce remuneration- you could ask your employees to take pay cuts. You would of course need to have a clearly recorded agreement to do this after a period of consultation. However, sometimes this is still preferable to redundancies.
3. Consider whether there is a genuine redundancy situation.
Before you start any process of making roles redundant, you should first think about whether there is a genuine redundancy situation:
• Has there been a downturn in work? Does that mean you need to close a particular workplace or employ less people to do that particular type of work?
• Are there viable alternatives that you could use instead of making redundancies? If there are, then there cannot really be a genuine redundancy situation.
• TOP TIP: put together a business case document in which you work through the above 2 points- this will help structure your thoughts and can be a useful tool when announcing the start of the redundancy process
4. The process to follow- the basics
Before starting any process, first look at if you have any policies that may determine how the process has to look.
If you want more information on the process to follow, then why not join us on our webinar on 15 March at 10am CLICK HERE TO BOOK YOUR SLOT.
For the purpose of this snapshot, the things you need to be thinking of are:
1. The pool for selection
2. The selection criteria
5. Make a decision
6. Implement that decision
7. Deal with any appeals
REMEMBER! If making 20+ redundancies, then you will also need to do a collective consultation.
Some important things to flag:
– You are not making a person redundant- it is the role that is redundant. Therefore, avoid using language such as ‘you are redundant’ or ‘we are making you redundant’. Instead say things like, ‘your role is redundant’ or ‘your employment is terminating by reason of redundancy’
– If you’re making less than 20 employees redundant (i.e. standard redundancy process)- if you have employees in those roles that have less than 2 years’ service you could, technically, avoid going through a redundancy process and making a redundancy payment and you could simply terminate their employment. This is because to bring a claim for unfair dismissal or in relation to a redundancy payment, staff have to have 2 years’ service
– If you are making 20+ redundancies (i.e. collective consultation)- you will need to go through a collective consultation process, that is even if some staff have less than 2 years’ service. If you do not do this, then you could find yourself facing a claim for a protective award.
I appreciate the above is a LOT to wrap your head around. It is also a very BASIC bullet point list of the things you need to be considering. If you want to find out more and get fully knowledged (yes I’ve made my own word up) up on the topic , as well as have an opportunity to ask any questions you have, then please do join us on 8 March where we will discuss all things redundancy.
See below for our link to register- it is definitely not one to miss!