Redundancy should follow a prescribed process.
An employer should follow an objective process to ensure that any employees who lose their jobs are selected fairly. Employers should ‘consult’ with employees, and often ask for volunteers.
What is Redundancy?
Redundancy is where a role or position within a company or organisation no longer exists. As a result, one (or more) employee may lose their job.
Note: This blog only deals with the steps where less than 20 employees are to be made redundant – different, collective consultation, procedure apply where 20 or more employees are proposed to be made redundant. Also, it’s only employees who are protected from unfair dismissal, and entitled to payments like statutory redundancy pay, so this process also won’t apply to contractors or “workers”.
What are the stages of Redundancy?
An employer will generally follow the following broad process:
- BUSINESS REASON – establish and define the business reason for needing to cut the number of employees, and which roles may be at risk
- SELECTION CRITERIA – the employer will decide on the selection criteria, which must be objective and not discriminatory in any way
- CONSULT – consultation with the workforce affected by the proposed redundancies is an essential element of the redundancy process and should be ongoing, enabling employees
- VOLUNTEERS – asking for volunteers is common practice as redundancy may suit some employees and volunteers can help the employer to achieve the cuts they need without forcing redundancy on as many employees
- OFFER ALTERNATIVES – those selected should be offered any available suitable alternative roles in order to try to avoid terminating their employment as a result of their role becoming redundant
- APPEALS – it is good practice to provide an appeals process
How long does redundancy take?
There is no minimum period for which a redundancy consultation process should last where less than 20 employees are at risk of redundancy. Employers should still follow a fair consultation process before dismissing employees.
What are valid business reasons for redundancy?
This will be unique to the particular business that’s making redundancies. Usually, redundancies will result from a need to reduce costs in some way. For instance, there may be a need to cut headcount to reduce salary costs, or where improved technology means the job can be done by fewer employees, or by employees with different skill sets.
Redundancies can also be caused by a decision to relocate the workplace to another location that’s too far for employees to travel to – this is a redundancy due to the disappearance of the workplace. If the business is closing completely, that will also be a reason for redundancies.
What is a selection criteria for redundancy?
Selection criteria for redundancy must be objective and able to be independently verified, which means the employer can’t (fairly) select employees for redundancy for something subjective like “I don’t like him as much as her”. Selection criteria must not be discriminatory. Each situation is unique, and we’d advise on the appropriate selection criteria to use as part of our advice to employers on the appropriate fair redundancy process they should follow.
Selection criteria should be measured by reference to HR records – so if an employer doesn’t keep records, it will be harder to show they’ve carried out an objective selection process.
Redundancy should not include unfair selection.
What is a consultation process for redundancy?
A redundancy consultation process is a series of meetings and discussions between management and employees where the employer should explain the business reason for redundancies, and discuss how it impacts the employee.
The employee should be given the chance to make suggestions for alternatives to redundancy, and the employer should consider whether there is any suitable alternative employment available elsewhere in the organisation.
We can help employers put together the right consultation process for them, including giving a note on the procedure, setting out what to do at each stage, and draft communications to employees affected. Carrying out the right consultation process will help avoid successful claims and put the employer in a much better position.
Equally, we can help employees to raise concerns about the procedure their employer is following. We are often asked to be there to support employees through the process and keep an eye on how things develop, in case we advise that you should appeal, or that you may have a claim.
If we’re involved from early on, we can jump in quickly to take action and ensure that our client is in the best position possible (whichever side we’re on).
Can I volunteer for redundancy?
Employers will often ask for volunteers, but you can’t require your employer to make you redundant if they aren’t asking for volunteers.
If there’s some reason why you want to volunteer for redundancy, we’d suggest you get advice before going ahead, to ensure you can protect your position.
Should I be offered an alternative role?
Employers should consider whether suitable alternative employment is available for any employees selected for redundancy. Employees should be given the opportunity to apply for any vacancies, suitable or not, but should be offered suitable alternative employment if available.
In addition, women on maternity leave have special protection in redundancy cases, and must be offered (not just given the opportunity to apply for) any suitable alternative employment elsewhere in the organisation. This is a really tricky area, so we’d suggest that employers and employees seek early advice on what best to do, to protect their position and ensure compliance or cover off risk.
Can I appeal redundancy?
Employees should be given the opportunity to appeal their selection for redundancy. We’d suggest that you get specialist legal advice to help you prepare your appeal, especially if you think you are being made redundant for a discriminatory reason, or there is anything that feels wrong or unfair about the way things have been done.
When will I get my redundancy pay?
You should get your redundancy pay as soon as possible after your employment has terminated. If your employer doesn’t tell you when all payments will be made, you should ask them.
Generally, you’ll be due notice pay, statutory redundancy pay (if more than 2 years’ employment) and accrued holiday pay on termination.
Need more help with Redundancy?
If you need more help with the subjects covered here then do reach out to our expert redundancy solicitors. You can speak to our employment solicitors online via email email@example.com or call us on 03300 020 863.