In these uncertain times many businesses will be considering how to remain financially viable and one of the most common ways to do this is to reduce overheads by way of redundancies.
The importance of carrying out redundancies fairly and correctly cannot be overstated. The last thing that a business needs is for them to go through the time and expense of the redundancy process to then find that they are being pursued by an employee in a tribunal claim.
Consider alternatives to redundancies
There are several alternatives to consider before going through the redundancy process and of course these should be explored in the first instance. The business may find that if there are only a small number of redundancies required, they may be better placed to carry out a re-organisation of the business. However, if the best choice is to carry out redundancies then the business should ensure that it carries out a correct and fair procedure.
Consultation with a trade union or employee representatives
If the business believes that they will need to make 20 or more redundancies, then they will need to consult with the union. If there is no union available, then the employees must be allowed to nominate employee representatives.
Once the union or employee representatives are aware of the situation all the people that may be affected by the redundancy process should be written too. This correspondence should confirm;
- the reason for the redundancies
- that the business has explored other options to redundancies and which options were explored
- ask the workforce after considering the above whether they have any suggestions which may reduce the need for redundancies
- try to lay down a timetable, although this may change due to circumstances outside the control of the business
- set out the proposed criteria the business will use for making the redundancies.
- confirm the date that they will have their first individual consultation meeting
Voluntary Redundancies and Individual Consultations
The next step would be to call for voluntary redundancies, it may be worth proposing an incentive for those who wish to take up voluntary redundancy.
If there are not enough voluntary redundancies, then the business will need to proceed with the individual consultations. The business may explore collective consultations however some employees may not feel comfortable asking questions in these circumstances therefore individual consultations should be carried out where possible.
At the consultation it is important to listen to the feedback in relation to the proposed criteria and alternatives to redundancies. If the feedback is relevant implement the alternatives to help, ensure employees opinions are valued.
Initial consultation and alternative employment
The employer will now need to go through the individual scoring of each employee, make sure that appropriate parties such as line managers/supervisors are contacted for their feedback on the employees as they may have better knowledge of the individual employees skills and assets.
Once the business has scored the employees send across a copy of their score sheet and if possible anonymous scores for other employees so that they can see where they fall. If they fall into a category where their job is at risk then they should be informed, the business should now have an idea of which employees will be made redundant.
Furthermore, the business may have identified some alternative employment instead of redundancy put this forward to the employee. Is the employee aware of any suitable alternative employment within the business? If this is not something, they have considered allow them some time to think about this further.
The next step is to hold individual consultations with the employees who are to be made redundant due to receiving the lowest scores. Give reasons for why the scores were provided and give the employees the opportunity to explain why they received their scores and why they believe they should have received a higher score. If you are happy with their explanation, then you should change their score.
Has the employees proposed any suitable alternative employment, if so, listen to the employee’s ideas with an open mind and see whether the business can implement this.
At this stage it should be confirmed that the employee has been selected for redundancy. There is no obligation to allow an employee to appeal, however it would be good practice to do so.
Also continue to search for suitable alternative employment and inform the employee of the same. Explain how the redundancy holiday and notice pay will be calculated and when this will be paid. Provide a copy of a suggested reference that you will provide to any future employers and seek the approval from the employee.
Inform the employee whether you will allow the employee to continue to work or whether they can stay at home. Also inform them of their entitlement to take a reasonable amount of time off work in order to look for a new job or attend interviews.
When the notice period ends make the agreement payments.
Throughout the process
At all times, communication should be a two-way process, if an employee feels that their opinions are being considered then they may feel less aggrieved by the redundancy process.
Allow employees to be accompanied at meetings either with trade union members or employee representatives.
After all consultations follow up with written correspondence in writing and encourage employees for their comments.
Meet regularly with the trade unions or employee representatives.
Evidence that the business is using redundancies as a last resort, show the employees the alternatives that were considered first and always be open to suggestions of suitable alternative employment.