Making staff redundant – get it right or risk facing costly Employment Tribunal claims

Recent headlines which saw Sainsburys announce they would be cutting 2,000 jobs, BAE Systems almost the same and Vauxhall 400, has highlighted the importance of businesses having the correct HR and legal resources to ensure organisations are following a fair and proper process.

Smaller companies rarely have inhouse resources to assist with similar problems, thus, making small scale redundancies comes with financial danger.

Employers should confirm in the first instance that it is a redundancy situation

Redundancies occur in three main scenarios:

(1)    The business is having to shut down

(2)    The location of work is closing

(3)    The need for a specific role dries up

It is important that employers select individuals in a fair manner, for example because an employee’s level of experience or capability to do their job. Employers must not select employees on the grounds of age, gender, disability and pregnancy. Failing to comply with these rules will result in an unfair dismissal.

In addition, before an employer decides to make an individual redundant, they should consider other alternatives to the problem. For example, stop recruiting new staff, cut over time and place employees on lay off.

Redundancy Consultations

Should you fail to consult employees in a redundancy, any redundancy made will almost certainly be classed as unfair, exposing employers to an Employment Tribunal claim.

Consultations should include:

– An explanation of the redundancy

– A discussion of any alternative

– Advice on alternative employment

– Listening to any proposals from those affected

– Asking if any employees would like to volunteer for redundancy

Selection Criteria

In this event, employers should consult those affected regarding the selection criteria. Examples of such criteria include:

– Attendance record

– Disciplinary record

– Skills and experience

– Standard of work

– Aptitude for work

Following this, employers should apply this criteria to the roles at risk via a scoring system. This should be applied objectively and personal opinions should not be taken into consideration. On calculating the final scores, employers will establish those employees who score lowest.

Provide those affected with notice

The employees who have been selected for redundancy should be given proper notice of the dismissal. Notice periods are usually the same as those you would give when terminating a contract of employment. Further, employers may establish they have other work available within the business. In this instance, a suitable role should be offered within the notice period before the end of employment and as early as possible.

It is important to note employees with 2 years continuous service at the business are entitled to a statutory redundancy payment up to a maximum of £14,670.

Comprehensive Employment Law Support for Business

Employment Law Services (ELS) is a leading provider of employment law and HR guidance and support to SMEs and Medium Sized Businesses in Scotland and England & Wales. We are proud of our strong reputation for delivering an effective service to employers across a range of sectors including Food and Drink, Telecoms and Distribution.

A number of our team members are recognised as experts in their field, qualified to provide bespoke assistance to clients that reflect the commercial realities they face. Of all areas of UK law, employment law is arguably one of the most complex and fast changing. This requires employers to consult advisors who are up to date with developments and able to keep them appropriately advised on the changing nature of their obligations.

Our service places priority on providing assistance to employers that is prompt and effective. The team at Employment Law Services (ELS) take their role very seriously, and work in partnership with employers to discharge their responsibilities to employees when pursuing a redundancy scheme. We will also be happy to provide onsite guidance and support to businesses, ensuring that they are appropriately advised on the day-to-day realities of operating a redundancy scheme. Contact our team today and find out how we can help you.

Please note, the information in this article is for guidance purposes only and it is therefore advised that employers seek legal advice before embarking on any enforcement action.