As Employment Lawyers, we are familiar with redundancy and what to expect. However, to most, both employers and employees, it can be somewhat unnerving. As you may be aware, ‘redundancy’ is one of the five potentially fair reasons for dismissal. However, for it to be fair, an employer needs to take certain steps; a failure to follow a fair procedure could result in an unfair dismissal complaint. This article explores redundancy and what to expect in more detail.
An employer should be as transparent as possible at all stages and seek to avoid redundancies wherever possible.
Whilst the steps below should not replace legal advice, we thought it might be helpful to note what to expect if you are facing a redundancy situation.
The steps involved are relevant to employers considering commencing a redundancy exercise and employees facing redundancy.
Redundancy and what to expect
STEP 1 – Is there a genuine redundancy situation?
The first issue to consider is whether there is a genuine redundancy situation. Generally speaking, redundancy is usually a type of dismissal when an employer no longer needs a role that the employee has.
So, the three questions that an employer needs to consider to establish whether there is a genuine redundancy situation are:
- Is there a closure of the business for the purposes for which the employee was employed?
- Is there closure of the place of business where the employee was employed?
- Is there a reduced requirement for employees to carry out work of a particular kind?
However, ideally, an employer should consider all options to reduce or even avoid redundancies before making the decision.
STEP 2 – Consider pool and selection criteria and list any alternative vacancies.
Pools
When considering what pools of employees to place at risk, employers should consider the following factors:
- What type of work is ceasing or diminishing?
- The extent to which employees do similar work (possibly even those at other locations).
- The extent to which employees’ jobs are interchangeable.
A sensible starting point for drawing up the pool is what the employees do regarding their day-to-day activities and contract terms. However, employers should consider the reality of the situation rather than simply what an employee’s contract says.
Selection Criteria
Once pool(s) have been established, objective selection criteria must be set. Examples include:
- Performance and ability
- Length of service
- Attendance records
- Disciplinary records
The above is not exhaustive but are examples of some of the criteria that could be applied; criteria must not discriminate either directly or indirectly against any of the protected characteristics, as this could result in findings of unfair dismissal and unlawful discrimination.
Alternative Vacancies
Employers should consider whether there are alternative vacancies at all stages of the process and provide the employees with a list.
STEP 3 – How many redundancies is the employer making?
It is essential to understand how many redundancies the employer is proposing. If there are more than 20, there are additional obligations and requirements. If this is the case, an employer must notify the Secretary of State.
STEP 4 – Informing Staff.
Once the employer is comfortable with the pool of employees and the selection criteria that will be applied when selecting employees for redundancy, employers should meet with all the employees (as a group) who might be made redundant to ensure the employees are fully aware of the situation. They should follow up on this meeting in writing.
Employers should invite employees to give suggestions for ways to avoid redundancies.
STEP 5 – Scoring.
The next step is to score each potentially redundant employee using the selection criteria and scoring guidelines.
STEP 6 – Provisional Selection and Consultation.
Once an employer has provisionally selected an employee for redundancy, they should invite that employee to a meeting to discuss their provisional selection in writing. This letter should include an invitation to bring a trade union representative or colleague to the meeting. It should be made clear that no decision has been made, and employees’ comments should be considered and followed up.
STEP 7 – The Outcome.
Once an employer has decided to make an employee redundant, they should invite that employee to a further meeting. Again, the employee should be able to bring a trade union representative or work colleague.
If nothing has changed, the employer should advise the employee that they have been selected for redundancy and take them through any redundancy package. Employees can take time off to seek alternative employment.
The employer should confirm any decision in writing and include certain information, such as any redundancy calculations that they have undertaken, in this letter.
Employees should, of course, be advised that they are entitled to appeal the decision.
As expressed above, this is not intended to replace legal advice. There are other considerations which may be relevant to your circumstances; we would be more than happy to discuss this with you.
If you would like more help on redundancy and what to expect, or the process you must follow as an employer, please contact us.
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