Redundancy – gone are the days when you would just call someone into the office and make them redundant. Here are 10 important points to consider.
Furthermore, despite all sorts of soundings about imminent redundancies as a consequence of Corona virus, the events of the last few months do not give an excuse for businesses to cut corners, circumvent process, to ditch any consultation and proceed as quickly as possible.
- Redundancy is a dismissal – redundancy is a fair reason for dismissal but can still give rise to a claim for unfair dismissal if the employee has over 2 years service unless there are grounds for the employees to argue discrimination – eg age, sex, disability, sexual orientation etc – and there is no qualifying service. Exercise considerable care in terms of any redundancy situation which involves an employee who is either pregnant or may have just recently returned from maternity because this can give rise to a sex discrimination claim and similarly, be careful of the possible risks associated with redundancy and employees who have recently had mental health or work related stress issues.
- Statutory consultation – where the employer is proposing to make 20 or more redundancies in an establishment i.e. site, location etc – there is a statutory consultation period of 30 days. For 100 or more, the statutory consultation period is 45 days. In many situations where the Company is contemplating large numbers of redundancies which triggers statutory consultation, there will be recognised Trade Unions who must be consulted.
- Consultation (non statutory) – even if you are just making one employee redundant, there is still a need to engage in consultation with the employee. The issues on which you may consult may include alternative employment opportunities, means by which the redundancy could be avoided and some explanation regarding the business rationale for the redundancy – reduced sales, declining profits, loss of a key customer, introduction of new systems etc. Ensure that notes are taken at consultation meetings and followed up in writing to the employee.
- Consider alternative employment opportunities – so often, businesses fail to consider alternative employment opportunities within the business for people who are “at risk” of redundancy. Offer employees the opportunity to apply for other roles – even if you think they will not want to take a lower job. Let them decide – they may willingly take a drop in status and salary to remain employed.
- “At risk” – in the first event, advise the employee their role is “at risk” of redundancy and commence a consultation process. Confirm this in writing – often, the first conversation with an employee will be a shock and they may not process everything you say so it’s important to confirm in writing otherwise, you’re going to be mis-quoted.
- Selection criteria – often this is the single biggest area where employers trip up. If the role to be made redundant is “stand alone” ie no other person in the business does that role, it will be fairly straight forward but where you have a team of 10 people – Accounts Payable Assistants – for instance – and you now only need 6, you will have to establish the appropriate criteria for selecting the employees who will go and stay. It is important to be open and transparent about the criteria you are using – productivity, efficiency, skills etc. You may use criteria such as absence but be careful not to fall foul of disability discrimination if the absence is related to certain ill health conditions. Criteria should always be objective not subjective and consider carefully who is going to do the skills assessment because it is very likely that someone may suggest that favouritism and bias has crept into the assessment.
- Recent recruits – be careful if you are making an employee redundant and in the same office or department, you have recently recruited someone to do a job that could have been done by the employee who is now facing redundancy. If the person facing redundancy does not have the skills or competence to do the job – you should ask yourself the question – could this person do the job with training? It may not be practicable but at least ask the question.
- Don’t confuse the issue with performance – if there is just one redundancy and it’s a stand alone role, don’t muddy the waters by bringing performance into the discussion. The likelihood is that the employee will argue that there has been no effective performance management mechanism or that performance issues have never been addressed etc – so if you decide to make a role redundant, keep it clean and do not bring performance allegations into the discussions.
- Right of accompaniment – offer the opportunity for an employee to be accompanied at redundancy consultation discussions by either a work colleague or a Trade Union official but you are not required to allow an employee to bring a solicitor to the discussions. However, Trade Union officials have hectic diaries and re-arranging consultation meetings to accommodate their availability can be used as a delay tactic.
- Face to face, skype, zoom, by text…….for many years, it has been seen as best practice to ensure that redundancy discussions take place in person – face to face. It has always been seen as disrespectful and impersonal not to do it face to face but Corona virus has changed our outlook and whilst it doesn’t negate the need for consultation, it has become acceptable over the last few months for issues to be managed via skype, zoom, conference call etc. You hear stories about people who are made redundant by text and sometimes people seek to make mileage out of this by going to the local newspaper and this can cause brand or reputational damage.
However, being made redundant can be quite an emotional and unsettling experience and people often think – “why me? or “what have I done wrong?” Often when an employee is made redundant, they will suffer low self esteem and confidence and whilst it is correct to say that it’s the job role that is redundant, the reality is that the job role is done by a person and people have feelings and emotions.
If you make an employee redundant, you’re never going to be told how well you dealt with it, but it is important to stand in the shoes of the person being made redundant and they deserve to be treated fairly, professionally and with sensitivity. People are different and different people will react in entirely different ways.
AB Commercial HR Solutions have extensive experience of manging clients in all sectors with managing redundancy processes and if you need HR Support, get in touch.
