Managing Redundancies in challenging times

As we enter the New Year and the number of people being made redundant increases by the day it is clear that few sectors across the economy will be spared the fall out of the credit crunch and what appears to be a deepening domestic and global recession.

A backdrop of falling business levels and business cut backs seems to provide employees with less scope to dispute whether there is a genuine redundancy situation. It is important therefore that employers do not get tripped up by the procedural requirements of carrying out a redundancy and are comfortable with the process so that the best is made of what is undoubtedly a difficult situation and they do not find that they are facing unnecessary claims from employees.

The procedure for carrying out redundancies is broadly as follows:

  • Employers must consult with all employees who may be affected by the proposed redundancies giving as much warning of the impending redundancies and ensure a fair procedure is followed.
  • This procedure must comply with the minimum requirements regarding dismissal set out in the statutory Dismissal and Disciplinary Procedures. A failure to follow these statutory requirements will make the dismissals automatically unfair.
  • Adequate information regarding the reasons for the proposed redundancies must be given in good time in writing to allow employees to respond;
  • Consideration must be given to any points made by employees and throughout the process consider whether there is suitable alternative employment that may be available for the employee:

It is essential that a fair and objective selection process is agreed and applied. This is in three stages:

  • the selection of the pool of employees from which redundancies will be made;
  • the selection criteria to be applied to them; and
  • the manner in which the selection criteria will be applied.

Selection Pool

Consider employees who are doing the same or similar work as the group from which it is first considered that redundancies will be made or whose skills are interchangeable from one department (or establishment) to another. Also consider those working on different shifts but who essentially are carrying out the same work.

Selection Criteria

Employees should be assessed against selection criteria and allocated marks for each one. The marks may be weighted according to the importance of each criterion to give an overall mark for each employee. The scores must be applied in a fair and objective manner.

Consultation with the Employee

The employee should be invited to a first consultation meeting at which the individual should be informed that their role is ‘at risk´ of redundancy. Particular care should be taken to avoid giving any impression that a decision has already been made. The employee should be informed as to the reasons for needing to make redundancies and should be asked to consider whether there are any options as alternatives to redundancy that they would like the company to consider before making a decision on the issue. Employers should also inform the employees that they will consider whether there are other opportunities or vacancies which can be offered to the employee by way of suitable alternative employment.

After an adequate period of consultation a second meeting will be held and if there are no alternatives to suggest and other issues have been adequately dealt with then the employee should be informed that their role is redundant and an explanation given to them as to what they will receive by way of severance pay. If there are any alternatives to consider, then it may be necessary to adjourn to reconvene for a third time to consider the employee’s proposals.

Where employees are in a ‘pool´ for selection purposes they should be informed of the scores that they have been given and should be given an opportunity to challenge those scores prior to any decision on their role being made.

Employers should not forget to offer the individual the opportunity to appeal against the decision and should follow up the final meeting in writing confirming the decision.

Every employee who is put at risk of redundancy and indeed many others who are not will inevitably be unhappy. If, however the process is managed properly then they will hopefully recognise that they are being treated fairly. This is important not only in mitigating the risk of a tribunal claim but also maintaining the morale of those who remain.


About the Author: John Ruddell is an Employment Law Solicitor at Barlow Robbins LLP in Woking and Guildford

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