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Top ten tips for managing a redundancy situation

Post date: 09/10/2018 | Time to read article: 3 mins

The information within this article was correct at the time of publishing. Last updated 15/03/2019

Employment law experts Croner Consulting provide advice on how to manage redundancy within your practice to ensure the rights of employees are respected.
1. Genuine redundancy

Redundancy is one of five potentially fair reasons for dismissal. However, as an employer it is your responsibility to show there really was a genuine redundancy situation. This is usually the case where a business is closing down, or if the need for employees to carry out work of a particular kind has ceased or diminished, or is expected to cease or diminish. Ensure everything is documented so that, if required, you have evidence to prove to a tribunal that there was a genuine redundancy situation and the role(s) of those being made redundant have gone as a consequence.

2. Selection criteria justification

One of the big challenges of any redundancy situation is selection. Make sure that you identify all people who should be included in the selection pool. Your selection criteria must be applied consistently across the selection pool and they must be capable of being objectively justified. Avoid selecting people for redundancy purely based on personal views and focus on factual information like appraisal outcomes and attendance.

3. Discrimination is a definite no

You must ensure that the redundancy selection criteria are non-discriminatory. This means you must not choose criteria, which if applied, could treat workers with a protected characteristic less favourably than those who do not share that protected characteristic. Protected criteria include:

  • age
  • disability
  • gender reassignment
  • marriage or civil partnership
  • pregnancy and maternity
  • race
  • religion and belief
  • sex
  • sexual orientation.

For example, if attendance is a criterion, make sure you exclude any disability or maternity-related absence. You should also avoid using ‘last in, first out’ as a sole criterion.

4. Consultation

Being ‘fair’ is all about proper consultation. If you are proposing to dismiss by way of redundancy 20 or more employees, you will need to comply with the consultation timeframes. It is also advisable to ensure that you hold one-to-one meetings with affected employees so that you can talk through the reasons for the employee’s selection and the possibilities for avoiding dismissals properly. It is important to keep notes of these consultation meetings.

5. Flexible timetable

Don’t make your timetable too rigid. It must be flexible to allow employees to come back for more meetings where there are issues to discuss, or where extra information is needed. If a group of people are at risk, this will make the process longer. If you don’t build in enough time you run the risk of being accused of not properly consulting those at risk. This could result in a claim that the procedure was unfair.

6. Gather ideas

It’s very important that you look at all options for how to reduce redundancies. This may include speaking to colleagues who are not at risk and offering them the option to take voluntary redundancy or job-share roles.

7. Alternative employment options

As an employer you are obliged to see whether there is any other suitable work available. You must provide full details of any vacancies so that employees can evaluate the opportunity properly.

8. Air any grievances early

Make sure that your consultation process allows those ‘at risk’ to air their grievances before they are selected for redundancy. If an employee does raise an issue, ensure you investigate and feedback to them fully before making the dismissal.

9. Procedures

The BIGGIE! You must adhere to a fair and reasonable procedure. Before making any decision to dismiss, employers should invite employees to attend a formal meeting and allow them to bring a colleague or trade union representative with them. It is advisable to use this meeting to recap on the process to date and ensure that all alternatives to redundancy have been carefully considered before confirming any dismissal. Following the meeting, employers should confirm the outcome of the meeting in writing and inform the employee that they have the right to appeal. If an employee does appeal, they must be invited to a formal appeal hearing with a manager not involved in the decision to dismiss.

Employees have the right to be accompanied and employers must confirm the outcome in writing. Failure to comply with this procedure could result in a tribunal finding the dismissal was ‘procedurally’ unfair. Northern Ireland employers must ensure that they comply with the Statutory Dismissal and Disciplinary Procedure, or any dismissal could automatically be deemed unfair.

10. Contracts

Throughout the consultation process, you will need to be aware of any contractual entitlements that affected employees may ask about. For example, eligibility for enhanced redundancy pay, bonus payments etc. Ensure that, if your timetable does slip, contracts are re-reviewed and any outstanding benefits are paid. Employees who are dismissed on the grounds of redundancy will be entitled to either statutory notice or contractual notice, whichever is the greater.

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