In today’s uncertain business climate many firms face the possibility of having to reduce their operating costs. This means that many managers will have to run a redundancy process. Apart from being an unpleasant process to manage, it can also be a legal minefield. As such, it is important to follow the correct procedures. The redundancy process follows the stages outlined below:
This includes assessing whether redundancy is actually necessary before starting the process. You should also identify your time frame and prepare the appropriate documentation.
This includes selecting the pool of people under consideration for redundancy. You will also need to determine the criteria to be used in selecting those individuals. It is important that the selection criteria is objective and can be applied equally and fairly across the workforce. For example, experience, capability, relevant skills and competence.
There are legal time frames regarding consultation depending upon the number of people being made redundant. If an employer intends to make more than 20 people redundant, this triggers collective consultation requirements. This includes minimum consultation periods during which redundancy dismissals cannot take effect. Whilst there are no set rules for fewer than 20 redundancies, it is important to explain why an individual has been selected and to consider alternative employment in the company.
Notice of Redundancy and Appeals
Always remember to write to your employee to inform them of the dismissal and allow them the right of appeal.
The Termination Process
All employees in the UK with more than two year’s service qualify for a statutory redundancy payment. Remember to provide the employees with a written record of how the statutory payment has been calculated.
Throughout the process, communication is absolutely key. Having determined the need for redundancies and selected the criteria, it is good practice to ensure regular and open communication. This will help you and your firm to show that you’ve conducted the process in a fair and equitable manner in accordance with required legislation. If you are unsure about any legal aspects of the process, it is best to seek legal advice from a suitable law firm.