Redundancy and reorganisation situations can be overwhelming and unsettling for everyone in the workplace, both employers and employees. The redundancy procedure is a legal requirement for all businesses, and employers need to follow it very carefully to ensure that employees have been treated fairly and to avoid unfair dismissal claims.
Here is a brief guide for both employees and employers on some of the essential steps in the redundancy process. This process can take 2-4 weeks depending on the number of employees affected.
- Make sure there are no alternatives. Both before and during the redundancy process an employer has to be completely sure there is a genuine redundancy situation and there are no alternatives, including changes to an employee’s terms and conditions such as reduced working hours or pay, or alternate roles.
- ‘Suitable’ alternative roles. To be considered a suitable alternative, a role needs to be similar in regards to duties, skills and terms and conditions. If an employee refuses a role that is deemed a ‘suitable alternative’, then they would not necessarily be entitled to redundancy. If the role is not ‘suitable’ in legal terms, e.g. a more junior, it can still be offered to an employee but if they don’t accept it they would be entitled to redundancy pay.
- Focus on the role, not the person. When determining which roles will be placed at risk of redundancy it is important to remember that the employer needs to focus on the role, rather than the individual employee undertaking that role.
- Make sure your pool is fair. If several people perform the same or a similar job within the area of business, they will all need to be included within the ‘pool’ of people at risk of redundancy to make selection fair. During the Coronavirus pandemic, employees should not be selected for redundancy just because they’re shielding as this could be disability discrimination.
- Criteria for scoring. Employers need to develop logical and objective criteria to score staff against to determine who will be dismissed for reason of redundancy.
- Consult with those as risk. Once an employer has selected the pool for redundancy, they need to let people know their post is at risk and why, and be completely clear on their reasons for redundancy. If there is more than one role at risk this initial consultation can be done in a group setting, however during Coronavirus employers can conduct all consultations remotely by phone or video – there is no legal requirement to consult face to face.
- Individual consultation. Following the group meeting, employers will need to hold individual meetings with everyone in the ‘pool’ to get their input on the selection criteria, seek volunteers for redundancy, and provide an illustration of redundancy entitlements. Employees have the right to be accompanied in consultation meetings and suggest alternative options to redundancy. It is important that thorough and accurate notes are taken during these meetings, and that an outcome letter written to the employee after the meeting addresses any points raised.
- Scoring the pool. After the first round of consultation meetings employers need to evaluate the feedback they have received from their employees on both the proposed redundancy situation and the selection criteria, and consider this when scoring.
- Second consultation. At the second consultation meeting employers should explain how an employee scored and offer them the opportunity to comment. An employer does not have to comment on how others in the pool scored in comparison.
- Follow up in writing. After the second consultation, the employers should address any additional points raised and invite the employee to a final consultation meeting, at which the outcome may be redundancy.
- Final consultation. At this meeting, an employer can issue the employee with notice of redundancy.
- Written notification of redundancy. The employer needs to confirm in writing that an employee’s role has been selected for redundancy, they will be dismissed and detail their leaving arrangements, notice and redundancy terms. This letter must also include their right to appeal this decision.
- Notice. If an employee is required to work their notice, the employers is legally required to continue looking for alternatives to redundancy during this period.
- The right to appeal. For the process to be considered fair, an employee needs to be able to challenge a redundancy decision. The appeal process should be as objective as possible.
- Redundancy pay. An employee only qualifies for statutory redundancy pay if they have worked for their employer for at least 2 years. There are varying levels of statutory redundancy pay, based on age and length of service (capped at 20 years).
- 0.5 week’s pay for each full year worked under 22
- 1 week’s pay for each year worked between 22 and 40
- 1.5 week’s pay for each full year worked aged 41 and up
How we can help
The above is a very simplistic look at the redundancy process and does not take into account all of the issues that may arise such as flawed selection criteria that may be tainted with discrimination e.g. due to an employee being on maternity leave or being a certain age, which could lead to claims of unlawful discrimination in an Employment Tribunal.
We advise and represent businesses with work forces ranging from small numbers to many hundreds on all aspects of employment law. We also act for employees who need clear and practical advice on their legal employment rights and options.Whether an employer or employee, we are able to deal with all conflicting aspects and comprehend both sides of every argument. We will always provide clear and up to date information on the anticipated timescales and costs and carefully manage both aspects.
If you are an employer considering embarking on a redundancy process, or an employee who has been selected for redundancy, our we can advise you on the correct procedures, check over any paperwork and advise on possible claims. Contact Alexis Lane for more information.