Man and a woman discussing redundancy management
Redundancy Management: How To Get It Right The First Time
July 28, 2020

As a result of COVID-19, many businesses have been suddenly faced with the prospect of letting staff go. For some, this will be their very first experience of redundancy management.

It’s natural to feel uncertain about how best to carry it out. After all, redundancy can have a significant impact on corporate reputation and employee morale. Here, we outline a redundancy plan to ensure you see it through properly.

Consider your options

Firstly, consider whether you actually have to make any redundancies. This might seem obvious, but there are actually a lot of alternatives. You could potentially reduce overtime if applicable, introduce short-time working (where staff work fewer hours or are paid less than half a week’s pay) or make temporary lay-offs (where employees take unpaid leave).

If you still need to make an employee’s role redundant, you may be able to offer them other work instead. And if none of these are an option, then yes – you might have little choice but to resort to redundancy. Ideally this would be voluntary rather than compulsory, though, as this saves going through the selection process.

Consult with your employees

You should communicate your plans to staff before proceeding with them. No employee will appreciate the shock of suddenly losing their job, and they’re entitled to a consultation that discusses why the decision has been reached and any alternate options. The selection can additionally be classed as unfair otherwise, giving them the right to take you to an employment tribunal. Therefore, consultation is essential to good redundancy management.

There are no legalities around how you carry out this process, unless you’re planning to make 20 or more redundancies within a 90-day period. In this case, you’ll have to follow these collective consultation rules:

  1. Notify the Redundancy Payments Services prior to the consultation.
  2. Consult with either trade union representatives or elected employee representatives. If there aren’t any, you should consult with staff directly.
  3. Provide all necessary information to those you’re consulting with in relation to the redundancy process. Ensure they have sufficient time to consider it, and to respond to any requests for more information.
  4. Give termination notices to the staff in question, showing the agreed leaving date.
  5. Issue redundancy notices.

Select fairly

When it comes to choosing the team members to be made redundant, the rationale behind the decision must be fair and work-related. It could be based on their skills, qualifications, aptitude or performance at work, for example.

Their attendance and disciplinary record are also fair reasons. Whilst their length of service can be considered, it must be warranted and can’t be the sole reason – otherwise it could be seen as age discrimination, even if it’s indirect.

There are justifications that are automatically unfair, including those related to maternity, family, age, disability, gender reassignment, race and sexual orientation.

Give the right pay and notice

To ensure you follow the redundancy management process correctly, get the pay and notice period right. If your team member has worked at the company for less than two years, then you won’t have to consider redundancy pay – although many still offer it as a gesture of goodwill.

For employees who have worked at the business for more than two years, you’d need to issue:

  • Half a week’s pay for each full year worked up to the age of 22
  • A week’s pay for each full year worked at ages 22-40
  • One and a half week’s pay for each full year worked following their 41st birthday

You only have to give staff a week’s notice if they’ve worked for the business for more than a month but less than two years. If the employee has been with the company for more than two years but less than 12, the notice period is a week for each year they’ve been employed. If they’ve been there for more than 12 years, it’s 12 weeks.

Offer additional help

Finally, effective redundancy management often comes down to doing what you can to help employees successfully and smoothly transition into a new job. This could take the form of paying for travel to interviews or counselling. There is also the option to provide outplacement services.

Outplacement Services takes support a step further. We have dedicated modules that cover the job search, interview advice, and mindset and wellbeing. You’ll be able to smooth your employees’ redundancy journey with the right help and advice. To find out more, get in touch today.

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