If you’re making staff redundant there are some essential points to bear in mind. It is all too easy to get things wrong, and if you do, you face the prospect of a claim for unfair dismissal. So, make sure your process is fair and reasonable.
The list is a long one, but here is a flavour of the things you have to consider
Consult individuals likely to be affected by redundancy
You need to give affected staff advance warning that a redundancy situation exists, and consult properly with each individual.
Consult with those preliminarily identified as redundant explaining why they were selected, invite their comments and explore the opportunity for re-deployment.
The requirement to consult individually applies even if there has been collective consultation with a representative body such as a trade union. Collective consultation must take place if 20 or more employees are to be made redundant within a 90 day period. If the number of people to be made redundant is between 20 and 99 inclusive, that collective consultation must last at least 30 days. If the number is 100 or more then the period must be at least 45 days.
If you publish a process for making people redundant, follow it!
Like grievance and disciplinary procedures, it is not obligatory to have any particular process, but if you have one it could be regarded as unfair not to apply it.
A robust redundancy process will have one or two stages of formal individual consultation, and each stage will be properly explained in writing to the employee.
Employees should be informed of their right to be accompanied, if they have one. There is no statutory right to be accompanied, but good practice is to allow for that. You can begin the process by drafting an Invitation to redundancy consultation.
Agree fair criteria
If there is a pool of people potentially affected, agree objective selection criteria by which employees will be selected as redundant from the pool. These criteria must be free from bias and discrimination, be explained to the employees in the pool. You must apply them fairly. Whether or not you are using an Assessment centre, you should document the criteria and accurately record how each potentially affected employee measures against them.
If you have asked for voluntary redundancies and have more volunteers than you wish, your selection criteria must, equally, be fair and non-discriminatory and objectively applied.
Inform people clearly
You should let staff know of the outcome of their redundancy process. If a redundancy is confirmed after consultation, issue notice of termination and inform employees in writing of their rights, including rights of appeal and any statutory/contractual redundancy payments that may be applicable.
Suitable alternative employment
If you are able to offer suitable alternative employment to employees facing redundancy, you should do so. What counts as suitable may depend on a number of factors which might relate to the location, status of the job, the employee’s skills, personal circumstances and salary. It may be reasonable for the employee to decline the offer of suitable alternative employment, in which case their redundancy will be confirmed. If they unreasonably decline, they may lose their right to redundancy pay.
Suitable alternative employment comes with a minimum 4-week trial period. This is for the benefit of both employer and employee. Ensure that any trial periods in alternative jobs are properly monitored and any re-training required is properly carried out.
Allow time off to find work
Allowed people reasonable time off to look for alternative employment, or to arrange and take part in training which enables them to take up alternative employment.
We finish where we started: it all boils down to fairness. Many of the steps above are legal requirements, but these are not the only ways in which a process can be viewed as unfair. A sensible way to look at it is if it feels unfair then an employment tribunal will probably think so too.
You can find out much more at Simplify the Law
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