Advising on Redundancies

During the 2020 pandemic, we’ve seen the word ‘redundancy’ more than usual, taking an employee aside to tell them that their job is at risk might be the toughest task you face as an employer.

The definition of redundancy is when an employee is dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to the fact that:

  • The employer ceases to carry on the business in which the employee was employed;
  • The employer ceases to carry on that business in the place where the employee was employed;
  • The needs of the business for employees to carry out work of a particular kind cease or diminish; or
  • The needs of the business for employees to carry out work of a particular kind in the place where the employee was employed cease or diminish.

Once an employer is able to identify that their situation falls within the definition of a redundancy, they are then able to make a redundancy plan.

Firstly, before deciding to make compulsory redundancies, are there any alternatives that the employer can consider? Are there any Employees who has made a request for flexible working? Or have expressed interest in wanting to reduce their working hours? Another option could be to consider voluntary redundancies which could help speed the process up. Additionally, if placing employees onto a temporary lay-off or short time working is not an option, or these have reached their maximum, it is potentially time to consider taking the step towards making compulsory redundancies.

So, what’s the first step?

A fair redundancy process is broken into these categories –

  • Genuine Redundancy
  • Consultation
  • Selection
  • Suitable Alternative Employment
  • Appeals and Dismissals

The word redundancy often conjures fear of immediate job losses and stress for employees in the workforce, firstly the employer should be mindful of this and encourage open and honest conservation from the start of the process.

One of the key elements of a fair redundancy process is Consultation. Depending on the scale of the redundancies, this can come in the form of ‘Collective Consultation’ (20 or more in a 90-day period) or ‘Individual Consultation’ (fewer than 20). The purpose of these Consultation meetings is to fully explain the reason(s) behind the potential redundancies, explain what the next steps are, a timescale of how long the process is anticipated to last for (when dismissals are likely to take place), what the selection matrix is potentially going to contain and to provide support and reassurance to the employees during this potentially stressful time.

Confidentiality is also paramount during a redundancy process and it is vital that the employer does not discuss employee’s personal circumstances with other employees as this could breach the fundamental confidence of the employer/employee relationship as well as confidentiality and data laws.

What happens if an employee wants to appeal?

An employee has a right to appeal the decision made regarding their circumstance. In their appeal letter, the employee should present the grounds for their appeal (e.g. information they felt was not taken into consideration, challenging their scores) and why they do not agree with the decision.

The Employer should carefully consider the letter of appeal and potentially hold an appeal hearing, which would give the employee the opportunity to raise their appeal case for consideration. Once the hearing has concluded, the employer should adjourn to consider all the information before making a decision.

If the appeal does not go in the favour of the employee, or they are not satisfied and feel they want to pursue their case further, they could potentially seek to raise a claim at the Employment Tribunal on the ground of unfair dismissal/discrimination (if they feel discriminated against based on the of the protected characteristics under the Equality Act 2010) – a redundancy can be classed as unfair if:

  • It is not a ‘genuine’ redundancy, it does not fulfil the definition of what a redundancy is.
  • The Employer has failed to follow the correct procedure
  • There has been a lack of consultation. This could be failing to meet the legal minimum periods, or the consultation itself was not ‘meaningful’.
  • Issue with selection criteria. This could be if some of the areas which were used as scoring are seen as discriminatory e.g. counting pregnancy/disability related absence in an attendance score.
  • Where suitable alternative employment has not been properly considered or is offered to an employee if it’s available.

How can CoLaw help?

Here at CoLaw, we can provide support and guidance to the employer to ensure that they understand the legal process of a redundancy, highlighting their statutory obligations during this process and guiding the employer to follow a fair procedure in line with best practice guidance.

Our team can also produce relevant documentation to be issued to affected employees which contains the correct legal information, and also provide onsite or virtual HR support during meetings with employees.