Making Redundancies As An Employer

Redundancy is a reason for dismissal that arises when there has been, or is going to be, either a closure of the business, the closure of the workplace, or a reduction in the need for employees.

Where a genuine redundancy situation arises, it is important that the Employer follows a fair and reasonable procedure to avoid potential liability for unfair dismissal.

What should a fair redundancy process look like?

While the exact process can vary depending on timescales and/or the number of employees being made redundant, Employers should adhere to the following steps:

  1. Establish a genuine reason for redundancy and identify those employees at risk of redundancy. If more than one, “pool” all employees that carry out similar work. 
  2. Invite volunteers for redundancy or early retirement.
  3. Consult with employees individually (or if 20 or more employees are at risk of redundancy within a 90-day period the employer must conduct collective consultation with a trade union or, where there is no union, elected employee representatives).
  4. Apply fair and objective selection criteria such as: skills or experience, qualifications, disciplinary records and performance. 
  5. Consider whether there is any suitable alternative employment available to offer employees at risk of redundancy.
  6. Allow employees who have been made redundant the opportunity to appeal the decision.

What rights do employees have on redundancy?

All employees, regardless of length of service, have the right to contractual notice, subject to a statutory minimum.

Employees with 2 years’ qualifying service have the right:

  1. Not be unfairly dismissed. This can be due to:
    1. No genuine reason - if an employee can show that the reason for the redundancy is not genuine (an unrelated reason, such as performance) then the dismissal may be unfair.
    2. Unreasonableness – employers must warn and consult employees, adopt a fair selection process and criteria and consider suitable alternative employment.
  2. To a statutory redundancy payment
  3. To time off to look for work or arrange training.

Sills & Betteridge LLP have a team of experienced employment solicitors who can advise and assist your company on all aspects of employment law, including redundancy situations.

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