Protecting your business during the redundancy process

Redundancy is a challenge that many organisations face at some point, but getting it wrong could cause more issues than had been anticipated, including potential employment tribunal proceedings. Head of Employment Law at Banner Jones Solicitors, Katie Ash (pictured), discusses the steps employers must take to make sure they manage the redundancy process properly and avoid potential legal action further down the line.

Firstly, it’s really important to clarify that when a business is making a redundancy, it is not a ‘person’ that is being made redundant, but rather a position. To that end, as an employer you

must be able to clearly show that the employee’s job will no longer exist, which means it cannot in any way be performance related, or down to a clash of personalities. This is an area where many business owners come unstuck, so it’s an important point to address upfront. Secondly, employers should be

aware that they must follow a fair redundancy process regardless of the employee’s length of service, but they are only entitled to a redundancy payment after they have been employed for two years or more. The amount they receive as a

redundancy payment under employment law will be based on the employee’s weekly gross pay, age and length of service. If you have reached the point

where compulsory redundancies are necessary – be that due to the relocation of the business, a

It’s important to follow the correct processes when making staff redundant

reduction in work required, or the closure of certain departments or divisions – you are no doubt already under substantial pressure, and it can be easy to make mistakes which could leave you vulnerable from a legal perspective. To protect your business, it is vital

that a fair process is followed, and this includes telling staff at an early stage that redundancies may have to take place. Employers shouldn’t forget to notify those staff members who are absent from the workplace, for example because of sickness or maternity leave. Next, it’s important to ensure

that the correct selection pool is identified and objective and measurable selection criteria are put in place. This consists of

‘To protect your business, it is vital that a fair process is followed, and this includes telling staff at an early stage that redundancies may have to take place’

80 business network November 2019

compiling a list of roles which could be affected based on the areas of your business that you are reducing, and then agreeing a system by which you identify and log the skills required for the business going forward; and ultimately how you will select who will be made redundant. This may seem impersonal, but

as the main objective is to remain impartial and non-discriminatory that is actually a good thing during the redundancy process. Once you have started the

redundancy process, you will need to enter into what is known as a consultation period with the employees. This consists of setting up a two-way dialogue with you and the employees you have selected for potential redundancy. This is an opportunity to look at

possible ways of avoiding the redundancy – perhaps by reallocating the employee to a different role - and would usually consist of at least two meetings.

At the first meeting you will

explain why they have been selected for redundancy and invite them to discuss their options. For example, they could be willing to job share in order to keep working at the company. If no alternative to redundancy

can be identified, then you will usually be required to have a second meeting with the employee to discuss your decision and what happens next, including any entitlements the employee has. Finally, formal notice of the

redundancy must be sent in writing to the employee and they should be offered the right to appeal the decision. Although, if the process has been followed correctly, there may be little grounds for them to do so. It can be a tough process for all

concerned. However, if you have explored every other avenue and are left with little choice but to make redundancies, having the correct processes and policies in place before push comes to shove can help ensure you are compliant and protected from potential claims. Just remember, making someone

redundant is not a quick and easy way of getting rid of a problematic employee. If you cannot demonstrate that the role itself is redundant, you could find yourself facing legal proceedings for unfair dismissal which can be costly, time consuming and reputationally damaging.

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