3 tips for a fair, compliant redundancy process
Redundancy is a potentially ‘fair reason’ for dismissal, but should only be completed by following correct redundancy procedures. An employee is considered to be redundant in law if “the employer has ceased, or intends to cease, to carry on the relevant business at or reasonably near the place where the employee is employed; or the requirement for work of that kind has ceased or diminished or is expected to do so”.
If your organisation needs to make compulsory redundancies, here are 3 things you should do:
1: Look to avoid redundancy, if you can
You should take all the steps you reasonably can to avoid the need for redundancies. Avoiding redundancies helps everyone involved. Some alternative examples of what you could consider include:
- Offering unpaid career breaks/sabbaticals on a commercial level: This way you can avoid the cost of redundancies and the loss of experienced staff. This is especially important if you then need to recruit again in six months time.
- Pay freezes or pay cuts: While pay rises are always desirable, it may be that employees will understand and settle for job security rather than a pay rise.
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2: Don’t forget the business justification document
It is critical for there to be a ‘fair’ decision so that you justify why you are taking the proposed redundancy (e.g. sales have reduced from x to y). As part of that, the people who are affected have to be identified (i.e. what ‘pool’ or pools of people are at risk).
Tribunals are very aware that sometimes redundancy is used when it is in fact about poor performance – this can lead to a claim of unfair dismissal being found if the ‘reason’ has been abused. Remember:
- Be careful of your language throughout the document and avoid sounding like it is a fait accompli.
- Remain open and communicative, and do not predetermine the outcome. Use words like ‘proposed’, ‘potentially’, ‘may’, ‘could’ etc.
3: Follow a robust redundancy process
If you want to keep costs to a minimum and avoid tribunal claims, as well as doing the right thing, then managing redundancy in the right way is key. You should always follow the correct procedures and adopt the correct process when managing each individual redundancy scenario.
Basically, there are five main steps to consider during the redundancy process which are:
- Selection, including identification of the selection criteria
- Individual consultation and collective consultations (if required)
- Notice of redundancy and appeal process
- Facilitating the termination process
Remember, it’s important that you support your outgoing employees with workshops to help them find a new job role. That might be support with CV writing, job searching, or coming to terms with the emotional aspects of job loss.
In the event that you have to make job cuts, we can offer support to ensure you follow a fair and legally compliant process.
Lisa Trent is our HR guru
There really isn’t very much to do with people that she doesn’t know about! Whether it’s furloughing or people management, she’s on hand to listen and help.
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