Redundancy

Unsurprisingly, redundancy has become a very popular search issue in the current climate.

From the employer’s point of view, the process to handle potential redundancy situations starts as soon as the possibility of cuts is realised. The first step is to arrange to discuss the situation with employees (where there is no formal structure in place for staff consultations (such as a works council, or a trade union), employers should facilitate the election of staff representatives).

Consultation with staff should consist of a genuine, meaningful, & open dialogue (supported by relevant information), and needs to explore all alternatives to redundancy, including reducing the working hours, finding alternative work for surplus staff, and cutting pay or other business costs; any changes to employment contracts will need the approval of the staff before these can be implemented, but in a bid to maintain jobs, staff will often be open to this.

Should it become clear that redundancies are unavoidable, the employer needs to draw up a selection process – again, after consultation with staff. The selection criteria needs to clear & well-defined, fair, & capable of being applied independently; an appeals process should also be included.

The specific criteria employers adopt will vary, and may be dependent on the business & its needs in the immediate & longer-term: if a company employs & relies upon some particularly skilled staff, it may want to ensure reductions from this pool are limited to ensure the business’s continued survival, while staff with more easily replaceable skills could be lost, increasing the chance that the company won’t fold, with the whole workforce out of work.

Other criterion that employers may wish to consider includes:

• Attendance
• Disciplinary
• General experience & performance
• Aptitude & flexibility – after a redundancy process, remaining staff may need to cover a wider range of work, and it could be important the business has maintained staff able to apply themselves to this.

There are numerous criterion that if used to influence selection will automatically make a redundancy unfair, generally being any reason that would otherwise make a dismissal unfair. Avoiding such selection criteria will help ensure the redundancies can’t be challenged in this way, although that still won’t always make the dismissals fair.

Once staff have been selected for & given notice of redundancy, the employer should make all reasonable efforts to support them in what will be a difficult time. Reasonable time-off for staff to look for alternative work should be permitted, and employers should also provide staff with any information that will help them adjust to being out of work or advise where their skills could be improved to help in applying for new work.

While there is a lot for an employer to do when facing a redundancy situation, this process can be completed relatively quickly – the minimum length of time from the consultation process to notice of redundancy taking effect is prescribed in law, dependent on the number of employers likely to be affected, but the whole process can often be managed within a few weeks.

For businesses preferring to manage these issues themselves, ‘Redundancy handling’, a comprehensive booklet on this subject, is available from ACAS. For those preferring to obtain professional & prompt advice that will help ensure your procedures won’t lead to a successful employment tribunal claim against the company, contact Employment Law Clinic: