Coping with redundancy

Staff cuts look like a risk for many employers and employees in 2008/9.

It is not just City and Wall Street bankers who are suffering from head count reductions, but employment prospects seem decidedly uncertain for estate agents, high street retailers and house builders, to name just three.

Whilst losing one's job is for nearly everybody totally unwelcome news, it will be less of a shock if both parties have anticipated what needs to be done before any staff can be made redundant. This applies whether the job losses are due to a restructure or straight-forward head-count reduction.

provides an excellent and up-to-date step-by-step guide for employers considering a redundancy exercise , together with legal overviews and a full set of supporting redundancy documentation. There is also, for employees, clear guidance on such terminology as unfair dismissal, compromise agreements and involuntary redundancy.

For employers, here are a few health warnings about the redundancy process. Employees facing unemployment and with unfair dismissal in their thoughts, will find the health warnings very relevant to them too:

• No one should be confirmed redundant or given notice of dismissal on grounds of redundancy until after the consultation process is completed.
• Whether the company is considering compulsory redundancies or voluntary redundancies, there are strict notification procedures if the company is considering reducing the head-count by 20 or more within a 90 day period.
• Redundancy is a form of dismissal and therefore the statutory dismissal procedures should be followed.
• Depending on the numbers involved, the employer may have to build into the redundancy exercise a process for carrying out an election for representatives.
• The consultation process should be meaningful and therefore redundancies not a foregone conclusion; any alternative solution should be actively sought and considered.
• Don't discuss compromise agreements and severance packages too early in the process.
• Really look for alternative vacancies and never ever assume that someone will refuse a role because it is of lower status or pay.
• Check absentees are also kept informed throughout the process and invited to meetings etc.
• Directors of companies should check their Articles of Association and ensure that any additional statutory procedures regarding the removal of directors are followed. Remember to notify Companies House.
• Companies should not make any false promises or ones which may be genuinely meant but that cannot be guaranteed - eg that there will be no further redundancies and that this is the end of the process.
• Take care re garden leave - this should not be used until the employee has been given notice - check the contract for a clause that the company has permission to use this.

To summarise, always bear in mind the factors a tribunal will consider in deciding whether a redundancy dismissal is fair:

• Was sufficient advance warning given to employees?
• Were the selection criteria reasonable (and free of any form of discrimination) and were they applied fairly?
• Was proper consideration given to suitable alternative employment?
• Did consultation take place with recognised trade union or elected employee representatives, if required?
• Did proper consultation take place with the individual(s) selected?

can guide you through the process to ensure you comply with the law and can defend claims. We have a specific Pay As You Go redundancy package, or you may prefer to use our ongoing advice and support services. Subscription will give you access to our complete website, including access to a redundancy policy , template letters for informing of redundancy consultation and confirming redundancy PLUS legal overviews , a step by step guide to redundancy and a redundancy pay reckoner .