Whilst employers aim to avoid redundancy situations wherever possible, unfortunately most businesses face making redundancies at some point, whether in relation to a workplace closure or to restructure roles to suit the changing needs of the business going forward.
It is important that employers manage redundancy situations effectively to avoid the risk of claims for unfair dismissal and for failure to properly consult employees. Our next training session on 3 July 2019 will look at the legal requirements when dismissing for redundancies and how to best manage this process, both to avoid claims and to minimise the impact on the workforce.
In the meantime, we have set out some of the top tips employers should consider when looking at redundancies below.
Before commencing a redundancy process you need to ensure that your situation falls within the legal definition of a redundancy situation. In simple terms this is either the closure of the workplace or a diminished need for employees to carry out “work of a particular kind” i.e. a reduction in the size of the workforce.
Although many employers see redundancy as a kinder or less controversial option, redundancies should not simply be used as an opportunity to remove unpopular or underperforming staff. You need to identify a real reduction in the work the employer requires to be undertaken.
This is the key risk area for employers. It is vital that employers do not just look at the particular role they wish to remove, but take a broader approach, concentrating on the type of work that is reducing and who does that work. Employers should consider interchangeability between roles, for example whether other employees have been involved in undertaking those takes and whether “bumping” should be considered. This may mean a wider pool from which to select employees for redundancy then the employer originally intended.
The consultation process that is required varies depending on the number of positions that are at risk of redundancy. If an employer is considering making 20 or more roles redundant then collective consultation obligations apply. These include a minimum consultation period of at least 30 days depending on the numbers affected, obligations to notify the Secretary of State of the redundancies and, if no existing representatives are in place, to arrange appropriate elections to select representatives to consult with the employer on behalf of the affected employees.
Individual consultation is also required in all cases and will usually involve a minimum of two meetings with the affected employees on an individual basis.
Consultation should be “meaningful” which means it must be undertaken at an early stage before any final decision is made by the employer. Consultation covers the reasons for and alternatives to redundancy, not just the redundancy process itself. Employers must therefore be prepared to consider any alternative proposals put forward by employees or their representatives.
Another key risk area is the scoring process. Where an employer needs to select which employees will be made redundant, for example, choosing 3 from a pool of 6, this must be done using a fair and objective selection process. Potentially fair criteria include performance and skills required for the business moving forward. Disciplinary record and attendance can also be used. It is helpful to use a broad selection matrix to ensure fairness. This should be coupled with a clear guide for managers undertaking the scoring as to how scores should be assigned. Scores should be verifiable by reference to evidence, for example from employee’s appraisals or records of performance against target. Wherever possible the scoring process should be undertaken by at least two people to reduce the risk of bias. Reasonable adjustments should be considered to prevent any disabled employees being placed at a disadvantage, for example by discounting absence connected with a disability when scoring for attendance.
Employees should be given an opportunity to comment on the selection criteria as a whole and their individual scores.
If you would like to attend our training session on 3 July 2019 exploring these issues in more detail, please contact Sophie Warren.