Redundancy has become a more prominent feature in business and the Employment Tribunals since the latest recession hit in 2008. In recent years it has become more heavily scrutinised and often employers are questioned on their understanding of its definition. For employers it is vital that a fair and equitable procedure is followed to ensure a just outcome. Here are a number of key tips for employers.
Redundancy – The Key Requirements
- Prepare a detailed business case which clearly outlines the organisation’s position and why redundancies are proposed, ideally giving a history of the financial background and the current situation meaning that changes are required.
- Compile a pre and post redundancy organisation chart, listing roles and positions but not employees’ names. Separately, compile a list of employees and their details.
- If you are considering restructuring roles within your business, new job descriptions and specifications will be required.
- If recognised by a trade union, inform them of the possibility of redundancies as they may want to consult with their members.
- If there are no independent trade unions involved, identify any existing employee representatives elected by the affected employees whose remit gives them sufficient authority to act as ‘appropriate representatives’. Alternatively, arrange for elections to be specifically for the purposes of consultation and receiving information.
- If you are proposing 20 or more staff redundancies then you need to ensure a HR1 form is completed and issued to the Insolvency Service according to the timescale below.
- Consider suitable alternative roles and offer trial period to redundant employees.
- Prepare financial statements for redundant staff who will receive redundancy pay
Minimum period for notification and consultation, and for supply of the HR1 form:
- between 20 and 99 redundancies at one establishment in a period of 90 days or less, at least 30 days before the first dismissal;
- 100 or more redundancies at one establishment in a period of 90 days or less, least 45 days before the first dismissal.
Whether looking to make 1 or a 100 employees redundant, it is always essential that you have a clear and detailed business case outlining the situation behind your redundancies, detailing what alternatives you have explored and why it is crucial to your business that redundancies are made. This provides you with sound evidence should your position ever be questioned at tribunal.
- Consultation must be fair, meaningful and reasonable. You need to ensure that whatever procedure you are following, whether it is a single post holder and/or a pool redundancy procedure, that you allow enough time to consult meaningfully with the affected parties and allow them time to consider whether there are any alternatives to avoid redundancies.
- Redundancy dismissals are often criticised and therefore it is imperative that the procedure is sound, you don’t want the risk of potentially turning a fair dismissal unfair because of flaws in the consultation and procedure.
- When assessing what procedure your business needs to follow, you need to explore whether the affected party has any capabilities for other roles within the business and this is particularly important in single post holder procedures. This is a good measure to show reasonable and fair consultation and employees can often make worthwhile proposals, which in turn need to be explored.
- Keep the affected parties abreast of any developments and vacancies in the business and/or group.
For further clarification please call Peninsula Business Services on 0844 892 2810