FAQ’s for Businesses on Redundancy

As the furlough scheme comes to an end, many businesses are facing difficult decisions around redundancy. Following on from this week’s Law Society Solicitor Chat on this topic, Priya Patel from the FJG’s Dispute Resolution team has provided some answers to a few frequently asked questions about the redundancy process; such as how can employers ensure the redundancy process is fair? And how can a Solicitor help a business facing the prospect of making redundancies?

Talk us through the steps employers must take during the redundancy process.

1. Employers must establish whether there is a genuine redundancy situation in the first place. If there is a closure of the business, for example, there is likely to be a place of work redundancy.  Otherwise, is there a reduced requirement for employees to carry out work for a particular client?
2. Employers must then consider the pool and selection criteria and list any alternative vacancies there may be.
3. If there are collective redundancies then employers must notify the Secretary of State that they are planning to make collective redundancies (there are specific time limits for discharging collective redundancy related tasks).
4. The first meeting should be held with employees who might be made redundant and then letters should go to employees informing them of the information given to them during the meeting. Employers should then score each potentially redundant employee using selection criteria and scoring guidelines. A second letter is then sent to employees who have provisionally been selected for redundancy and the individual consultations start.  They are usually followed up and a meeting outcome is confirmed. Shortly after that, dismissal letters can go and right of appeal exists.

How can employers ensure the redundancy selection process is fair and doesn’t discriminate?

Employers should construct a selection criteria and score against that selection criteria for identifying redundant people by reference to non-discriminatory factors, having regard to equality legislation and its own policies.

What would be considered a ‘collective redundancy’? How does this process differ from the standard redundancy process?

Collective redundancies are deemed necessary where 20 or more redundancies are being proposed within a 90 day period. The standard redundancy process differs because there is no need to observe the time requirements for conducting consultation.

What would be considered an unfair dismissal?

An unfair dismissal is any dismissal falling outside of the potentially five fair reasons for dismissing someone, and which falls outside of the range of reasonable responses for dismissing someone.  So, using the example of someone who has been dismissed for a misconduct reason, if it is a first offence and the misconduct is not so serious as to go to the root of the employment contract permitting an employer to treat it as at an end, dismissal in such circumstances may be considered to be unfair.

What top tips would you give to a business that is facing the prospect of making a redundancy?

1. Establish what risk there is to the jobs and in what areas within the business early.
2. Establish how many redundancies may need to be proposed.
3. Maintain good lines of communication with those employees who are identified as being at risk and try to help them by identifying suitable alternative employment within the business, into which they may be redeployed.
4. Listen to employees during the consultation stage and at meetings in regard to other ways in which they may be able to stay employed within the business and keep a record of avenues of search which have been completed by you [as the employer] to try to find ways around making the redundancies.
5. Score each potentially redundant employee by reference to the same selection criteria and scoring guidelines. Ensure that at least two managers conduct the scoring, to help ensure scores are objective.
6. When making the redundancies, write to employees confirming the decision to dismiss them as redundant and specify the termination date and explain the calculation of redundancy payment and other payments to be made.

Our friendly Employment Law team are available if you would like further advice, please contact us on 01206 700113 or email [email protected].