Last post: Nov 8, 2024
In light of the recent budget, we have had a few conversations with clients where they are having to consider making some extremely hard choices about the number of staff the business can reasonably sustain, to ensure that the business remains successful to continue to employ as many people as they can. A choice no business owner relishes making, but one that on occasions needs to be considered.
Redundancies, a quick guide from an HR solicitor of things you should consider as an employer.
Our colleagues at Horsfeild Menzies www.horsfieldmenzies.com have put together a list of 'must considers' (and not a full list, we suggest you always seek professional advice) if you are thinking about making redundancies.
1. Establish there is a Genuine Redundancy Need
Ensure redundancy is genuinely due to business or workplace closure, or reduced need for employees doing a particular kind of work. Also, consider if alternatives to redundancy, such as redeployment or reduced hours, are suitable for the business.
2. Plan a Fair and Transparent Process
Outline clear steps and timelines. This helps to ensure consistency and minimises legal risk. Engage with employees and unions where applicable and notify employees early about potential redundancies. Maintain transparent and clear communication with employees throughout the process.
3. Identify the Pool for Selection
Define a fair selection pool of employees, particularly where roles are similar or interchangeable. Employers can use objective criteria (e.g., skills, experience, attendance, performance) to select employees for redundancy, avoiding any discriminatory factors.
4. Individual Consultation
Hold one-on-one meetings with employees, explaining the redundancy situation, selection criteria, and alternatives, and listen to their views. Permit employees to be accompanied by a trade union representative or colleague in consultation meetings.
5. Collective Consultation (if applicable)
If proposing 20 or more redundancies at one establishment within 90 days, conduct collective consultation with employee representatives or trade unions. Inform the Redundancy Payments Service (RPS) in advance of 20–99 redundancies are planned or 45 days if 100 or more redundancies are planned. Allow at least 30 days (for 20–99 redundancies) or 45 days (for 100+ redundancies) for the collective consultation process. You must consult with trade union representatives or elected employee representatives – or with staff directly if there are none.
6. Offer Suitable Alternative Employment
Consider offering any suitable alternative roles available within the organisation to employees where this may be a suitable option. Employees who accept alternative roles are entitled to a four-week trial period to assess suitability.
7. Calculate Redundancy Pay
Provide statutory redundancy pay for employees with two or more years of continuous service, based on age, number of years in the job, and weekly pay (but is subject to statutory limits).
8. Issue Notice and Final Payments
Provide employees their contractual or statutory notice period (whichever is greater) or payment in lieu of notice if applicable. Ensure final payments cover redundancy pay, notice pay, outstanding holiday entitlement, and any other contractual entitlements.
9. Keep records
Document each stage of the process, including taking consultation meeting notes, selection criteria, and redundancy decisions, to ensure transparency and provide evidence if challenged. Once you are in the final stages, you must ensure to provide each redundant employee a written notice of redundancy, detailing reasons, final payments, and other relevant information.
Many thanks to our colleagues at Horsfeild Menzies for providing an insightful article on ensuring you take the proper steps when considering redundancies.
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