3 things to do if you are making compulsory redundancies in your organisation.

Redundancy is a potentially ‘fair reason’ for dismissal, but should only be completed by following correct redundancy procedures.  There’s a technical definition of redundancy in section 139 of the Employment Rights Act 1996.

In summary, a redundancy situation exists if:

1.     has stopped carrying on the part of the business for which you were employed

2.     is closing down the place where you worked

3.     is reducing head count because they no longer need as many staff as they used to

If your organisation needs to make  compulsory redundancies, here are 3 things you should do:

Look to avoid

You should take all the steps you reasonably can to avoid the need for redundancies.  Avoiding redundancies helps everyone, examples of what you could consider are:

·        Offer unpaid career breaks/sabbaticals on a commercial level, that way you can avoid the cost of redundancies and the loss of experienced staff. In our experience, losing tacit knowledge is sometimes hugely detrimental to your business. This is especially important if you then need to recruit again in six months’ time.

·        Pay freezes or pay cuts; while pay rises are always desirable, it maybe that employees will understand and  settle for job security rather than a pay rise.

Don’t forget the business justification document

It is critical for there to be a ‘fair’ decision so that you justify why you are taking the proposed decision, e.g. sales have reduced from x to y.  As part of that, the people who are affected have to be identified, i.e. what the ‘pool’ or pools of people are at risk.  N.B Tribunals are very aware that sometimes the reason for redundancy is used when it is in fact about poor performance – this can lead to a claim of unfair dismissal being found if the ‘reason’ has been abused/manufactured.  Remember:

·        be careful of your language throughout the document and avoid sounding like it is a fait accompli.

·        remain open and communicative, and don’t predetermine the outcome. Use words like it is ‘proposed’, ‘potentially’, ‘may’, ‘could’ etc.

Follow a redundancy process

If you want to keep costs to a minimum and avoid Tribunal claims as well as doing the right thing then managing redundancy in the right way is key. You should always follow the correct procedures and more to the point adopt the correct process when managing each particular redundancy scenario.

Basically, there are five main steps to consider during the redundancy process which are:

1: Preparation. 

2: Selection including identification of the selection criteria 

3: Individual consultation and collective consultations (if required). 

4: Notice of redundancy and appeal process. 

5: Facilitating the termination process. 

If you would like to discuss this and anything else relating to your people, we are here to help.
Don’t forget we can also help out if you do have to make those job cuts with support to ensure you follow a fair and legally compliant process and we can also support your outgoing employees with workshops to help them find a new job role (so support with CV writing, job searching and coming to terms with the emotional aspects of job loss)