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Coping with redundancy
Staff cuts are a risk for many employers and employees in the current
economic climate.
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 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 you are considering compulsory redundancies or voluntary
redundancies, there are strict notification procedures if you are
considering reducing head-count by 20 or more within a 90 day period.
- Redundancy is a form of dismissal and therefore a fair
dismissal procedure should be followed.
- Depending on the numbers involved, you 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 (including those on long-term sick, and maternity or
adoption leave) are kept informed throughout the process and
invited to meetings etc.
- Directors of companies should check their Articles of Association
and ensure that any additional legal procedures regarding the
removal of directors are followed. Remember to notify Companies
House.
- Do 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 permits you to do this.
But the biggest problem for an employer has to be fudging a redundancy
situation to get rid of someone who is under-performing, particularly
when the under-performance has never been tackled before, or where
someone's "face just doesn't fit" any more. It's one of the easiest
routes to an unfair dismissal claim we know of - and its also one of
the most costly!
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 any 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 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 .
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