Dealing with a redundancy situation can often be a very daunting and an emotionally difficult time for any business (especially small businesses), sometimes involving long-serving, loyal employees who find their jobs at risk.
Offering ‘redundancy’ is sometimes considered an easy method of removing an employee even when there is no true redundancy situation – for example, due to poor performance. This isn’t a legitimate redundancy situation, as there is no downturn in work of a particular kind at a particular site. Unless there is a genuine redundancy situation, a Tribunal judge will find that this was an unfair dismissal and it can be an expensive mistake for employers to make.
One of the key points that a Tribunal will consider is whether the employer has explored all avenues to try to avoid having to dismiss employees. Redundancy dismissals should be a last resort. For this reason, the first step should be to put together a sound and compelling business case or rationale, which clearly explains the reasons this situation has arisen, what other steps you have taken and what other options you have considered. This will usually include:
- What alternatives to making compulsory redundancies have been considered (i.e. voluntary redundancies, early retirement or a reduction in sub-contracted work)?
- Is this a unionised environment?
- Which roles (not people) are ‘at risk’, or likely to be affected by the changes?
- How will you consult with those affected?
- How many positions need to go? How much financial saving is needed?
- What are the timescales involved? Are there external time pressures?
- How do you propose the business will look at the end of this process?
Once you have answers to these questions, you can start consultation. Input from employees can be vital in finding suggestions you hadn’t thought of previously.
From your employees’ point of view, the big question is who should be selected and how you will decide this. This is an area that is often overlooked. Get this wrong and this could be very costly for the business, in a time when you can least afford it! This will usually involve scoring employees in the same/similar roles against each other in ‘pools’. Failure to follow a fair and transparent selection process may give rise to a successful unfair dismissal claim, regardless of a genuine redundancy situation.
Scoring involves setting criteria that measure employees’ abilities, skills and experience against each other. The criteria should be a mixture of objective criteria and essential skills deemed necessary for the running of the remaining business, and you have to avoid any categories that might be discriminatory. These criteria are often the source of contention. They must therefore be simple, clear and you must consult with your employees on how you propose to score them. Without this, a tribunal may consider that the scoring has been contrived to achieve a premeditated, and therefore unfair, result.
HRFace2Face can help you to avoid pitfalls within redundancy consultation processes, which can often be extensive and complicated. Our on-site HRFace2Face Consultants can either conduct the consultation meetings on your behalf, from start to finish, or we can just be on-hand to offer guidance with specific situations.
For further information on how our HRFace2Face Service can help your business, whether this be with a redundancy procedure, or any other form of employee meeting, please give a member of the dedicated HRFace2Face team a call on 0844 892 3911.
We look forward to hearing from you.
Head of HRFace2Face