Sometimes businesses need to handle employment issues such as redundancy. It’s never a pleasant topic to discuss, but you have a legal obligation to consult regarding redundancies in a fair manner.

If this is the first time experiencing redundancies, read on to understand the process which will alleviate some stress surrounding the situation.

Legitimate Redundancies

To meet the criteria for legitimate redundancy, you must prove that the employee’s nature of work is stopping, or going to be stopped in the near future.

Some examples of genuine redundancy situations include:

• the workplace closes because the business has ceased trading
• the work the employee conducts is no longer needed due to a change in business direction
• the business moves location
• new workplace systems and technologies mean that the job role is rendered unnecessary

Business Case for Redundancies

Before considering making any employee redundant, create a solid business case. Bear in mind that an employee who has worked for you for more than two years has the right to make a claim for unfair dismissal. Getting legal advice at this juncture gives you the best chances of avoiding disputes.

Redundancy Roles

Make sure you acknowledge that employees have roles in different areas of the business that could be considered similar. When you are considering a position that is at risk of redundancy, ensure you look for any parallel roles in different teams.

Employee Consultations

You are legally required to start the internal consultation process as soon as possible, while the redundancies are still proposals rather than decisions taken. This will probably take the form of a group meeting involving staff whose roles are at risk of redundancy. You will need to explain the issues facing the business and your initial thoughts and plans.

This meeting should give employees the opportunity to ask questions and feed into the process. It is important that you explain that no decisions have yet been made and this is the start of the redundancy consultation. Seek advice from an employment lawyer who can advise you on how you continue to communicate with your teams throughout the process.

Selection Criteria

After establishing a pool of potential redundancies, you can then decide on which criteria you will use to generate the final list. This can involve reviewing individual staff members on objective criteria, such as performance, disciplinary record and skillset.

Under the Equality Act 2020, it is illegal to select staff for redundancy based on protected characteristics. Employers can easily find themselves at risk of indirect discrimination claims so it is vital to get specialist legal advice to ensure your selection criteria are appropriate.

Communication and Alternatives

After scoring individual employees based on your selection criteria, it’s time to carry out further consultation with those affected. This should involve a series of meetings with individual employees. Treat this as part of the consultancy process and give everyone involved the opportunity to suggest any alternatives that you may not have considered.

Those at risk of redundancy should be offered another position in the organisation, if at all possible. That means that the job should be one which they are qualified to carry out, even if it is more junior than their existing role. If the individual declines the opportunity to take a ‘suitable role’ then they may not be eligible for a statutory redundancy payment. It is important to get legal advice on what constitutes a ‘suitable role’, which is generally assessed from the employee’s perspective.

Final Consultation

In your final meeting with each affected employee, you will decide whether or not to issue them with a redundancy notice. However, it is important to give each member of staff the opportunity to ask any questions or raise any points before you make a final decision.

If you are going ahead with the redundancy, you will need to follow up the meeting with a letter confirming this and outlining their terms and right to appeal. Your employment lawyer can advise you on the correct wording to use.

Prepare for Appeals

By following the correct legal advice, your business minimises the risk of a tribunal claim. However, a fair redundancy process typically includes the right for every employee to appeal the decision. If, following the appeals process, the individual still feels the decision is unfair, they may decide to pursue a claim through an employment tribunal.

Following the redundancy process and getting specialist advice throughout will help ensure you fulfill all the legal requirements as an employer.

Get in touch today for a chat to ensure your business remains compliant during the redundancy process.