Simple steps in redundancy situations

We are facing unprecedented times, many businesses are now in a situation in which they need to restructure, with less orders, clients or customers it is inevitable that you may need to look at this now or in the not too distant future.

If you have ever had to make any redundancies in your business you will already know the process can be not  just upsetting it can be highly stressful, it is imperative the whole process is managed effectively, areas can easily be overlooked, ignored or simply misunderstood.

The information contained here is not comprehensive, it is an overview only, the redundancy process is complex, we handle redundancies daily, we understand not just the process, we ease the tension, alleviate the stress; above all we ensure you remain legally compliant.

 

The basic rules in a redundancy situation

1. You need to consider what is your business reason for redundancy?

It is pretty safe at the moment to assume that the redundancy reason within your business would be due to COVID-19, this may be a restructure or a downturn in work.

2. You also need to consider what is your  reason for making the role/s redundant?

There are various options to factor in, in the instances above again it would be fair to assume COVID-19 being the impactor, it is always crucial to bear in mind that you can only make the role/s redundant and not the individual/s themselves.

**Where this is not the case it could lead to a claim for unfair dismissal.

 

It is always prudent to identify ways in which you have explored alternative options, this may be:

• By not using seasonal/temporary or agency workers
• Freezing all recruitment
• Freezing overtime hours

Making the decision and the right choices

There may be times where only one person is at risk due to the role they currently fulfil, it may be that the role is no longer required, where this is the case the choice and option is relatively easy, so long as there is no other suitable alternative role available.

On the other hand, if you have a whole department or team perhaps it then gets more complicated, let’s take a look at how you could deal with it here:

 

You may have 10 production workers but due to a restructure in your business it will only leave you with enough work for 6 workers in the future, based on that you have a strong case to make the 4 roles redundant.

Now the basic maths has been worked out and that is the easy part and also your business case it needs to be handled fairly and in accordance with legislation; to do this you need to follow a process. It is at these stages that a tribunal will deliberate over your evidence and decisions.

Once you know how many, you need to decide who

Newbies out first  – is it a quicker option

Many businesses opt for this, it is more commonly known as “the last in first out” approach, you would base your decision on the newbie’s start date, irrelevant of their skills, performance, attributes etc. it does save heaps of time initially.

In addition, because newbies have less than 2 year- service they don’t have the right to claim unfair dismissal, it can therefore sound appealing to exit any newbies.

A word of warning

Anyone regardless of their length of service have protection against automatic unfair dismissal. In the case of dismissal of an employee with a protected characteristic, for example disability, gender, sex, age or a statutory right.

 

How else can you decide?

You can use a criterion method  – it may take longer but it is fairer.

To ensure you are treating everyone fairly the best option is to use a criterion method, you can chose a method best suited to your business, the role, skills and qualities you require for your business not forgetting your culture.

By choosing this method you are demonstrating your fairness, you are ultimately choosing people based on their skills, performance, testimonials, output, qualifications and you can add in live disciplinary records.

 

This method is the most preferred choice and with the best results although undoubtedly it does take longer. It is important that you inform individuals of the process.

 

How to communicate 

Communicating with your people along the way is important, once you have made the final choices for redundancy you need to dismiss, we noted earlier it would affect X4 people, you do need to ensure you make the necessary notice, holiday and any redundancy payments in their final salary payments.

 

We are experts in this field, please contact us for assistance, if you are considering any formal redundancy process in your business, we can help you at every step, have all of the relevant correspondence which is tailored to your individual needs and above all we will ensure you remain legally compliant.

 

get in touch on: 01254 467156  [email protected] or simply complete our contact page on our website and we will be in touch.

 

As advised, this information is not comprehensive, the redundancy process is a complex area, our advice is to always get in touch.

 

Author

Fran Crossland

HR and You Ltd