Making redundancies can be the hardest part of the process when you need to streamline your business. It can sometimes feel as though you are in a nightmare of potential litigation.
Making sure you follow the rules can not only protect you from costly tribunals, but make the whole process less emotional for all involved.
Your number one consideration is to ensure that your employees are informed every step of the way. Failure to consult with employees, or their representatives, during the procedure not only results in uncertainty and fear within the workforce: it will almost certainly render any redundancies unfair – opening up the possibility of expensive tribunals.
Secondly, it is important to remember that it is the job that becomes redundant – not the person. Whether it is because a manual operation has been superseded by technology, or simply that a particular function is no longer necessary, the job itself must disappear when the employee leaves. Contrary to popular opinion, it is perfectly legal to take on new staff whilst others are being made redundant. It may be that the skills needed to take your company forward cannot be found in your existing workforce -so as long as the new recruits are taken on to fill different functions, this is a perfectly legitimate process.
Once the need to make redundancies has been established, there are several stages which the employer will need to go through in order to ensure that their obligations are met.
Establishing The Criteria For Redundancy
The objective of redundancy should be to create an effective, streamlined workforce that are best able to take your business forward. Establishing well defined criteria for selection is the most effective way of ensuring that all employees are treated equally, and their benefit to the company is properly assessed. The criteria you use may include:
- Adaptability – this is especially important if your company is moving into a new sphere or market in order to progress: you will need to retain those employees who can cope best with change and have the ability to adapt.
- Skills ” maintaining a good cross section of skills will assist you in maintaining a balanced and effective workforce.
- Performance ” it is a wise move to retain your hardest-working employees. You will require documented evidence to support your decisions to avoid potential complaints of unfair treatment.
- Attendance – this is a valid criterion if applied fairly and consistently. Remember that you cannot use lack of attendance due to maternity, paternity or adoption leave.
In an ideal situation, to make sure that the selection process is as fair and equal as possible, a combination of the above criteria should be considered.
Consultation is a vital part of the redundancy process. This is because it will minimise the likelihood of unfair dismissal claims and it will also ensure that you retain those members of the team who are motivated through your transparent communication.
If you are planning on making more than 20 positions redundant within a 90-day period, you will also need to inform the Department for Business, Enterprise and Regulatory Reform.
Rumours and speculation are unavoidable in times of change such as these. It is extremely important, therefore, to be as open and honest as possible so as to avoid unnecessary confusion. You should let those at risk know at the earliest possible point the reasons for the redundancies, the positions and departments affected, the likely number of employees at risk and the specific criteria you will be using in the selection process. You should also make sure that they are informed of timescales.
Contact each employee who is at risk of redundancy, detailing your reasons for the decision and arrange for a meeting to talk about the situation. If you fail to do this, it will automatically make any dismissal unfair.
If you continue to communicate openly with both at risk staff and those who will be staying behind throughout the process, it will help to keep negative emotions to a minimum and reduce the possibilities of claims of unfair dismissal.
Whilst you are not legally required to do so, it is thought to be good practice to give as much practical assistance to those who have been chosen for redundancy as possible. This could be in the form of offering help regarding looking for alternative employment, guidance on CV writing and interview techniques or advice on financial planning in the meantime. Offering such assistance will help to maintain good relationships even with those employees who are leaving: once again, minimising the likelihood of complaint or legal action.
The procedure of making redundancies can be a very difficult task, particularly if you are not aware of its emotionally charged nature or of the possible legal ramifications.