“One in three UK employers expect to make staff redundant
between July and September.”
Following a recent survey conducted by recruiter Adecco and the CIPD, it was announced this week that the redundancy flood gates were opening as the closure of the furlough scheme begins.
The coronavirus pandemic has affected every business across every industry. As an employer, you’ll know the disruptive effect it’s had on your business, and you may have to face the harsh reality that you may not be able to bring all your staff back from furlough.
This blog is written as a step by step guide to help you through the redundancy process while highlighting some of the pitfalls you may encounter.
Preventing a Claim
Despite your best intentions, even a genuine redundancy can result in an employment tribunal. With average costs of £8,500 per claim, it’s critical that as an employer, you follow strict consultation procedures throughout the redundancy process.
Let’s face it, making genuine redundancies is simply awful for everyone involved. Whatever the circumstances, it’s never easy to tell anyone “you’re no longer needed” which is often all the employee hears when you deliver the bad news.
Your Rights and Responsibilities
As an employer, making sure you know your rights and responsibilities will not only help you to save time and money, but it will also help you to make the conversation easier. You’ll be confident delivering definitive answers, suggest decisive actions to move forward and have prescribed procedures which ensure you’re working to the letter of the law.
Once you understand your working parameters, you can then focus on the emotional aspects of the conversation and provide a caring and gentle ear for listening, but let’s start with the details first.
- Expert Advice.
You must get expert legal advice before embarking on any conversation with employees about redundancy. It will help you to mitigate the risks of a claim but also give you the confidence to deliver the news with clarity. - ‘At Risk’ letters.
You must give your employees advance warning if their job is at risk of redundancy in writing. Be sure to include anyone who may be absent from the office, including those on maternity and sick leave. - Equal selection
Creating groups or pools of employees from specific departments is advisable. If you need to make frontline workers redundant but wish to maintain warehouse staff, then identifying clear ‘at risk’ groups are essential. It’s advisable to create open discussions with your employees to ensure the groups are accurate and your selections are fair. - Defining criteria
This is a complicated process to get right. You need to ensure you retain the employees who help you drive the business forward but also maintain fair measures without discrimination. Begin by making a list of criteria based upon your business needs, including:- Skills and knowledge
- Past performance
- HR records to date
- Flexibility in terms of expertise AND working hours/conditions/location.
Once you’ve made your list of priorities, a points system may be the fairest way to move forward allocating and deducting accordingly.
- Beginning the consultation process
This phase should be precisely what we’ve described: a process. Your initial meeting with your employees may begin with a discussion to see if there is a way forward without making the redundancy. Perhaps your employees would be willing to job share, go part-time or even take a pay reduction? If these options are viable, then the consultation can move into a different direction. If however, this is not feasible, then you must be wholly transparent on why this particular employee is selected for redundancy. You must put the reasons and notice in writing and give your employee time to consider. Additional meetings may be required.
At the final meeting, details of the notice are discussed. At the end of this meeting, you must disclose your final decision and discuss the next steps in the redundancy process. - Settlements
If both employer and employee agree, a settlement is reached to halt the redundancy process. It also means that an employee can no longer bring a claim against the employer. A financial arrangement is reached, and paperwork is drawn up to reflect the agreement, and the process concludes.
Making employees redundant can be extremely stressful for both parties. Following a prescribed process with fixed procedures and records in place enables you to manage expectations and guide your people with clarity and decisive action.
If however, you do find yourself in a difficult situation whereby an employee brings a claim of unfair or constructive dismissal, you can be confident that you have done everything possible to follow the law.
For more information on unfair dismissals and tribunals, our next blog will highlight the key points in mitigating the risk of costly claims.
For expert legal advice on all HR, matters contact the team at SFB Consulting. We’re always on hand to help. Phone: 01279 874676.