Making redundancies is a big decision. And one that you need to think carefully about.
Not following the proper process when making redundancies can have serious consequences for your business.
And even if you do everything correctly, you could face unfair dismissal claims if you don’t follow a fair process.
That’s why it’s important to create a business case for redundancy. Luckily, we’re here to help.
In this guide we’ll explain what a redundancy business case is, why it’s so important and how to write your own business case.
We’ve also created a redundancy business case sample that you can download below.
What is a redundancy business case?
A business case for redundancy is a document that details the need to reduce the workforce.
This is the first step to take before making redundancies. This is because it will help you to decide if it’s necessary. It’s essentially a redundancy proposal.
Redundancy business cases and employment law
You need to write a business case, even if you know that you’ll have to make redundancies.
There are a lot of rules to follow when making redundancies and having a thorough business case will prove that you considered your options.
Having this document can protect your business from unfair dismissal claims and costly legal expenses - the last thing you need in an already difficult situation.
How to write a redundancy business case
There’s a lot to keep in mind when writing a business case for redundancy.
Your redundancy plan needs to:
- Explain the situation that has led to potential redundancies.
- Outline the number of employees affected.
- What alternatives to redundancy might be possible.
It’s important to remember that your business case is a part of the process for deciding if you need to make redundancies. You can’t write it with the mindset that you will definitely be making staff redundant.
You should detail your redundancy business case without being confusing. It needs to be clear in case you need to defend yourself in a tribunal.
Your business case should include the reasons you are having to consider making redundancies. It should also include employment details for the affected employees and how making these redundancies will impact the remaining workforce.
Once your business case is completed, it should be shared with key members of the management team to help you make a decision about whether to implement the plan.
Redundancy business case template
We have provided a redundancy business case example document that you can download for free below.
Once downloaded, just fill out the template to complete your own redundancy proposal.
As discussed above, it should detail your business case for redundancy. If you don’t get it right, you put yourself at greater financial risk.
This template is designed to help you create your business case for redundancy. The letter must be transferred to your own letterhead, removing all references to Peninsula.
The template asks key questions that will advise you on how to structure your business case. Think carefully about each question and answer.
It’s important that your business case reads as a fluid document, so that any third party without knowledge of your business could read and understand it. The questions below shouldn’t be left in your final document and should instead be used as prompts to help you create a detailed business case.
This template will help you create a clear business case but for more specific advice, take a free advice call with one of our redundancy experts on 0800 028 2420.
Disclaimer: This template is provided ‘as is’ and Peninsula Business Services Ltd excludes all representations, warranties, obligations and liabilities in relation to the template to the maximum extent permitted by law.
Peninsula Business Services Ltd is not liable for any errors or omissions in the template and shall not be liable for any loss, injury or damage of any kind caused by its use. Use of the template is entirely at the risk of the User and should you wish to do so then independent legal advice should be sought before use.
Use of the template will be deemed to constitute acceptance of the above terms.