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How To Handle Redundancies

It is important to know your rights regarding a redundancy situation. 

If you believe you have been dismissed unfairly or the process was unfair our Redundancy Solicitors can help you with this and can represent you in a case at the Employment Tribunal.  For further information on how we can help you, please see our Employment Solicitors Services. 

It is also important as an employer to know the relevant bases that need to be covered, ensuring you meet the legal requirements, if you find your business is changing or closing and you need to consider a redundancy process.

The employment team at Eric Robinson have come up with a guide to help you as an employer to ensure that your redundancy process meets all the legal requirements. 

The following guide is aimed at organisations and firms looking to make more than twenty employees redundant

What is redundancy, and how can I prepare for it as a business owner?

Redundancy is where an employer needs to reduce their workforce. An example is if the business is closing, or specific roles are no longer required.

If you are an owner or manager of a business and you are concerned about a downturn in trade, it is crucial to consider the following:

  • Is there sufficient income to pay wages and keep the company afloat?
  • Is there enough work to keep your staff busy

Your thoughts may turn to making redundancies to reduce the number of staff members you employ to cut costs. This can be a daunting prospect which will affect you and your employees as you will be required to hold genuine and meaningful consultations.

Redundancies can often occur when the amount of work completely disappears or if the workload reduces. It can either be voluntary or compulsory. Although it might seem legalistic, you must ensure you meet the legal requirements if your business appears to be changing or closing altogether.

If you are a small firm or a larger organisation proposing to make fewer than 20 employees redundant, it is important to consider how the law changes and how to handle small-scale redundancies and plan around them.

Redundancy Consultation

When it comes to redundancy, the right to be collectively consulted applies when an employer is looking to make 20 or more employees redundant in one company over a period of 90 days or less. 

Individuals also have the right to be consulted by their employers because a Tribunal may view it as unfair if employers only consult unions and not individuals.

The employer should undertake consultation to reach an agreement with appropriate representatives on issues like avoiding dismissals or reducing the number of employees to be dismissed. 

The duty applies even when the employees who are being made redundant are volunteers. If a company fails to comply with these consultation requirements, it could lead to a compensation claim.

When it comes to redundancy consultations, they should begin in good time and must be:

  • At least 30 days before the first dismissal takes effect if 20 to 99 employees are to be made redundant at one establishment over a period of 90 days or less
  • At least 45 days before the first dismissal takes effect if 100 or more employees are to be made redundant at one establishment over a period of 90 days or less 

The Redundancy Procedure

Employers should consider establishing a formal redundancy procedure to be negotiated and agreed upon with a Trade Union or employee representatives. 

It is important to have full and effective consultation when drawing up a redundancy procedure. The process is designed to allay unjustified fears; this will also avoid the suspicion that redundancies are imminent and allow representatives to contribute to their views and ideas and have meaningful discussions on ways to avoid the Redundancy. 

The procedure could be incorporated into the company handbook. Employees could be led to make claims for unfair dismissal if you fail to comply with a reasonable procedure in respect of the Redundancy.

The contents of a formal procedure on redundancy should contain the following elements (depending on the size and nature of the company):

  • An introductory statement of intent towards an employee maintaining job security when practicable
  • Full details of consultation agreements with the trade unions or employee representatives
  • Which measures will be put in place to try and minimise or avoid the compulsory redundancies
  • Overall guidance on the selection criteria and any skill matrix that will be used
  • Severance terms details (i.e the redundancy package that is on offer)
  • The discussion could lead to voluntary redundancy
  • Meaningful consultations
  • Suitable alternative employment offers
  • Details of any appeals procedures
  • Existing policy on helping the employees who have been made redundant to obtain training or seek alternative work to try and get them back into work as quickly as possible.

The measures for avoiding and minimising any future compulsory redundancies can include:

  • Reducing overtime
  • Recruitment restrictions
  • Seeking applicants for voluntary redundancy
  • Cost Cutting
  • Salary reductions by agreement

Is there any information an employer must disclose about proposed redundancies?

In order to ensure their employee representatives can play a useful part in the consultation process over the proposed redundancies, the employer must disclose the following information in writing, which includes:

  • Reasons for the proposed redundancies
  • Numbers and descriptions of employees affected
  • The method with which they will be carrying out the dismissals (taking into account any agreed procedures including the period that the dismissals will be taking effect)
  • The method of selecting the employees who may be dismissed
  • How the redundancy payments, other than the legal minimum, will be calculated.

Eric Robinson Employment Law Solicitors

At Eric Robinson, our specialist employment solicitors regularly advise clients who require representation in an employment tribunal

They will also provide expert advice on unfair dismissal, discrimination, or breach of restrictive covenants. Our lawyers regularly partner with employers and employees looking to reach a settlement agreement or when dealing with a redundancy process from both the perspective of the Employee and the Employer.

We are authorised and regulated by the Solicitors Regulation Authority, and our team is ready to work closely with you. We are here to understand your situation and to advise you on what to do next.

Call us today on 02380 218000 to book your initial consultation or make an enquiry by filling out our contact form. 

We also have solicitor offices in Southampton (Hedge End & Bitterne), Winchester, London (Richmond), Chandlers Ford and Lymington, and we can discuss fixed fee options and whether legal expenses insurance could be available to you.