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Advice for Employers – The redundancy process

redundancy process

Some of you may be faced with making redundancies as the global pandemic of COVID-19 has wreaked havoc through what used to be our normal. How you make people redundant is important, it is imperative that the process is carried out fairly and in accordance with employment law to avoid any claims of unfairness.

The key elements of redundancy are consultation, selection, confirmation in writing and payment.

Consultation needs to happen when you are aware that there will be changes to the business and that some people may be made redundant. This is usually an announcement to the relevant department(s) depending on the size of the organisation. This first stage is the high-level communication, in the form of a briefing of anticipated changes to come. Employees who may be affected need to hear the same message at the same time and be allowed a short time to process the message. Usually such a meeting is better held face to face but there are exceptions and our current times mean this meeting can be held remotely instead. Remember to include people who may be away from the office including those on maternity leave, sickness absence, holiday, etc.

If you are in a unionised environment, you must incorporate members into your consultation.

If you are making more than 20 people redundant in a single establishment in a period of 90 days, this is known as collective redundancy and the process is slightly different. For example, employee representatives must be elected and involved in the consultation and consultation must begin at least 30 days before the first redundancy (this increases to 45 days if there are more than 100 redundancies). The employer must notify the Redundancy Payment Service where there are collective redundancies before consultation to avoid receiving a fine.

The next stage is to meet with employees individually, so they can make suggestions or ask questions. The interaction you have with people at this stage can inform your wider plan as you may discover aspects you hadn’t previously considered.

As your plan evolves and you know more about what job losses there will be, you can apply selection criteria. Naturally this needs to be fair, transparent and objective. Factors such as disciplinary record, performance record, skills and experience can be applied. To avoid discrimination, stay clear of any factors covered by the Equality Act 2010 and be cautious around using absence records as they may relate to disability or maternity.

When you have finished the consultation period, you can notify specific individuals that their position is going to be made redundant. Make sure you have the relevant information available in writing to give to each person, including their notice period, their leaving date, their redundancy payment amount, , how it has been calculated, the date it will be paid, any other payments they can expect (e.g. unused holiday) and how to appeal.

ACAS recommend you have an appeal process to allow people to air their views if they feel they have been treated unfairly and to mitigate the risk of an employment tribunal claim.

Throughout the redundancy process, think about the support you can provide to the various people affected including those who are at risk, those who lose their jobs and survivors. Make sure the people leading the discussions are equipped and well supported as the messages can be difficult to deliver.

I recommend clients draw up a plan to thoroughly consider all the requirements, dates and figures. This helps to ensure all stages are handled with the due diligence and care needed. Employers must be able to demonstrate that the consultation was genuine, and you listened and responded to questions and suggestions from your employees.

To help you navigate your way through the redundancy process I have put together this downloadable redundancy process guide outlining the stages of the redundancy process.

For further advice, contact me on Claire.carson@cognitivelaw.co.uk or take a look at our HR service page.

Claire Carson