Top Ten Tips... Managing Redundancies

For employers and employees alike, handling redundancies can be one of the most complex and potentially difficult situations that can arise within the workplace. It's vital that you, as an employer, understand your obligations, including employees' rights and the correct procedures to follow.

Here are our Top Ten Tips for managing a redundancy process...

1. Make sure redundancies are genuine and necessary

Redundancies are a relatively “fair” reason for dismissal but you must make sure that your situation is genuine and falls within the statutory definition of a redundancy. This type of dismissal usually occurs when a role is no longer needed. For example, you should only consider making redundancies if your organisation, or part of it, is; closing, or has already closed, changing the number of roles needed to do certain work and/or changing location.

It’s important that you ensure redundancy is the real reason for the dismissal. It can’t be used as an excuse to get rid of unsatisfactory employees. If you are concerned about the conduct or performance of any employees then you should follow a disciplinary or capability procedure instead.

2. Stick to your own policies and procedures

If you have redundancy policies and procedures in place in your business then it’s vital that you follow these to the letter and they should also be made available to any employees concerned. Should any redundancies end up at an employment tribunal, they will look closely to see whether or not you have followed a fair procedure.

3. Communicate with your employees

Ensuring clear communication with your team is vital and it’s important that you inform your employees that you are considering redundancies as soon as possible. You can hold a meeting, either in person or online for remote workers, explaining the risk of redundancy, how many you’re considering and how everyone will be consulted in the future. Those who are ‘at risk’ of redundancy should also have this confirmed in writing and you should keep everyone informed throughout the process.

4. Hold meaningful consultations

This step is fundamental to a fair redundancy process – you must consult with your employees before finalising any redundancies. The consultations must be genuine and meaningful or your employees may be able to claim for an unfair dismissal. During these consultations, you should discuss the changes that are needed and why as well as any ways you can avoid or make fewer redundancies. This is also the time to discuss the employees’ financial entitlements, including; the redundancy payment, any outstanding wages and annual leave payments.

5. Selecting your employees

It’s vital to the process that your selection criteria is fair and non-discriminatory. Take a look at factors that are ‘fair’ such as; performance, attendance and flexibility. Length of service can also be considered but be careful as this can discriminate based on age. Bear in mind that absence due to pregnancy, disability and other family-related leave should not be included in the selection process and reasonable adjustments should be made for employees with disabilities.

6. Figure out the financial matters

If your employees have been with you for 2 full years or more then, at the very least, you must pay them the legal statutory amount of redundancy pay. Don’t forget to double check your employment contracts too, as they may say you need to pay a higher amount. If you would like to encourage voluntary redundancies within your organisation, then you may wish to offer larger amount as well.

Visit the GOV.UK website to work out redundancy pay.

7. Give the official redundancy notice

When you have finalised the selection process and finished consulting with the relevant employees, only then can you give the official notice of redundancy. This should be done face to face, where possible and you should allow the employees to be accompanied during the meeting. Those who have been selected should also be given the details in writing – either by letter or email. When giving notice, you cannot give less than the legal minimum and this depends on how the long they have been in your employment.

less than 1 month ⁠–⁠ no statutory notice
1 month up to 2 years ⁠–⁠ statutory notice is 1 week
2 to 12 years ⁠–⁠ statutory notice is 1 week for each complete year they worked
12 years or more ⁠–⁠ statutory notice is 12 weeks

8. Offer an appeals process

In certain cases, an employee may feel as though they were unfairly selected for redundancy, therefore it is good practice to offer your employees the chance to appeal. Make sure to give the chosen employees an appropriate timescale in which to make their appeal and this should be done in writing. Where possible, its best if the appeals process is handled by a senior member of staff who was not involved in the initial redundancy decisions.

9. Offer suitable alternative employment

During the redundancy process, you must try and move the selected employees into other areas of your business wherever possible. If there is a suitable role available for the employee then you should offer it to them instead of redundancy. If you don’t do this, then the dismissal will likely be found ‘unfair’ in an employment tribunal.

10. Look forward to the future!

A redundancy process can lead to difficult conversations and situations within the workplace so it’s vital that you, as the employer, offer support to everyone involved in any step of the process. Whether that be the affected employees, managers delivering difficult news or the staff members staying on, you can provide counselling, additional meetings and clear plans for the future of the business. If you have done all of the above steps correctly then you should now have the right amount of employees in the right places and can take the next steps to a secure future.

For more in depth information about the redundancy process, visit the ACAS website here.

If you would like extra support with a redundancy or restructuring programme within your business, our HR consultants have extensive knowledge and experience in employment law and best practice in managing people. Get in touch to see how we can help.

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