Top tips for redundancy

August 26, 2015

Claire Morley-Jones, provides her top ten tips for managing a successful redundancy process.

  1. Don’t do it (unless you absolutely have to!). Consider all of the options at your disposal whether that’s short time working, freezing overtime, layoffs, re-structuring, sabbaticals or decreasing salaries and benefits (with employee agreement!!) Remember, when business picks up you’ll have recruitment and training costs so keeping your key people and top talent is essential to your future success.
  2. Remember to inform anyone else. You must follow ‘collective consultation’ rules if you’re making 20 or more employees redundant within any 90-day period at a single establishment and be sure to notify the Redundancy Payments Service (RPS) before a consultation starts. The deadline depends on the number of proposed redundancies.
  3. See if there’s anyone who actually wants to go. You don’t have to do it legally, but this really is the most effective way of minimizing the need for compulsory redundancies. You can still keep control of the process, individuals can retain some control over their own destinies but do make sure you communicate you reserve the right to reject any applications so you don’t lose your most valuable people! You could encourage people to take voluntary redundancy by offering a sweetener, i.e. an enhanced package before it reverts to compulsory redundancies under the statutory terms.
  4. Consult, communicate, listen and communicate some more. Anyone being considered for redundancy should be consulted – if there is more than one person doing the same role ALL individuals should be consulted. During this meeting you should discuss the business reasons for the potential redundancy, the selection criteria for deciding who will definitely be made redundant, and any ways there might be of avoiding redundancy and any alternative employment options. At times when redundancies are being considered it’s important to keep communication open and to anticipate and respond to comments.
  5. Plan your selection criteria very, very carefully! Your selection criteria should be objective, fair, reasonable and be capable of being verified! Last one in, first one out no longer cuts the mustard as a selection criteria! Also, remember that things like length of service could lead to age discrimination claims and attendance to disability discrimination claims, be wary of pregnant employees too!
  6. Remember those not at work. Many businesses forget to consult with individuals on long term sick, in another country, maternity leave or just based from home! These individuals must be treated in exactly the same way and receive the same communications. Remember, those on maternity leave have an automatic right to be offered alternative work!
  7. Consider alternative employment Legally you must consider alternative roles for potentially redundant staff, even after the redundancy is confirmed, and during any notice period. NB, you also need to consider vacancies in any associated companies. Also, you mustn’t make assumptions about the kind of alternative role that would be acceptable. If in doubt offer any vacancy that is within the employee’s capabilities, even if it is at a lower level of status or £.
  8. Offer as much support as you are able – You don’t legally have to do this but many employers offer help in finding another job (e.g. help with CVs, job applications, interviews etc). It’s also best practice to allow employees paid time off to attend interviews or to otherwise pursue their job search. In fact, those employees with at least 2 years’ continuous service who are under notice of redundancy are legally entitled to a reasonable amount of paid time off to find a new job or arrange training for future employment.
  9. Remember the paperwork – You need to keep complete, accurate and professional records of the redundancy process. All documents (whether written or typed, notes or a formal letter, and including emails and notes of meetings) are potentially disclosable in court so look after them!
  10. Last chance saloon! Redundancy should not be cited as a reason for dismissal if this is purely a ‘fudge’. The role must truly be disappearing, the business be folding or substantially restructuring and the individual should have been selected using robust criteria. If it is not a clear cut matter, the alternative you may wish to consider is offering a Compromise Agreement. This may cost a little more, but, if agreed, the individual signs their right away to take you to court; it is also quicker than formally performance managing someone out of the business. You will need a professional to agree the terms!

Remember redundancies need to be handled in a sensitive and legal way, if not, you could end up in court or damaging your company reputation.

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