With the increase in employers’ National Insurance contributions and the Living Wage taking place in April, some of you may be thinking about restructuring your workforce, or even possibly making redundancies.
Carrying out a restructure or going through the redundancy process is not without significant risk. Tozers provides tailored, clear and practical advice to reduce risk and ensure a fair redundancy process is followed.
What Is Redundancy?
An employees dismissal will be by reason of redundancy if it is “wholly or mainly attributable” to the employer:
- ceasing or intending to cease to carry on business for the purposes for which the employee was employed, or in the location where the employee was employed; or
- having a decreased need for employees to perform specific types of work.
Business Case
Before carrying out a redundancy process, you could consider some of the following questions:
- are the requirements of my business changing?
- how and what impact will this have on the number of employees required?
- which role(s) and employees will be affected by this change?
You can then draw up a business case briefly summarising why you are proposing to carry out a redundancy exercise and what you hope to achieve. The document can be provided to those at risk of redundancy. Whilst this step is not a legal requirement, it helps to demonstrate a fair process was followed.
Fair Procedure
If you have no choice but to make employees redundant, a fair procedure should be followed, and the outcome should not be pre-determined. Key elements of a fair procedure include:
- considering any alternatives to dismissal, including alternative employment ;
- where selecting between employees for redundancy, considering pools for selection and fair selection criteria;
- consultation (both individual and, where applicable, collective); and
- offering a right of appeal.
Carrying Out the Process
You should meet with employees you identify as ‘at risk’ and explain that redundancy is a possibility. If the number of redundancies is lower than the number of employees identified as 'at risk’, you should explain the selection criteria used.
‘At risk’ employees are then assessed against the criteria, helping to identify those potentially facing redundancy. Once identified, you should communicate with provisionally selected employees and invite them to an initial meeting.
Consultation meetings are valuable for discussing the scores of potentially redundant employees and obtaining their views. Further meetings may be necessary to consider proposed alternatives to redundancy or to address an employee’s challenge to their score.
After the process has concluded, employees must be notified of the outcome and their right to appeal the decision with any time limit for doing so. The letter should confirm how their period of notice will be treated, and the redundancy sum they will receive.
Next Steps
Carrying out a redundancy process can be complex. Ensuring the process has been conducted fairly is essential to avoid claims of unfair dismissal. Tozers offers advice on various employment matters. If you require assistance, please do give us a call on 01392 207020. You can also review other insights drafted by our Employment Team on our website.
