Handling Redundancies

More than 1.3 million workers have lost their jobs during this recession and there are substantial public sector job cuts to come, as the recession continues to bite.

Cutting any jobs is usually a last resort and needs to be handled sensitively and carefully as navigating the plethora of employee rights can be a minefield for any employer.

Staff with more than one year's employment, may be able to claim unfair dismissal if the redundancy is not genuine or if their employer fails to follow the correct procedures - so it is vitally important to ensure that you do.  If you are at all unsure, then it is best to seek legal advice.

For example, staff should be consulted in a series of meetings.  This gives them a chance to come up with suggestions for avoiding redundancy and to go through the payments they would receive.  If more than 20 employees are affected, there are additional obligations.

Where a job is "at risk" and a number are doing the same job they must all be put into a pool and scored against agreed criteria.  The criteria you decide on must be objective and non-discriminatory and could include qualifications, experience, performance, disciplinary record and attendance.  Those with the lowest scores will be made redundant.

Then, where employees have been selected for redundancy, you have an obligation to consider if there is any suitable alternative employment is available.  They also have a right to paid time off work to look for another job or arrange training.

Staff employed for more than two years will be entitled to a statutory redundancy payment.  Take care with all redundancy payments, particularly if you do not want them to work through their notice period.

You may wish to consider offering an enhanced redundancy payment, in return for signing a compromise agreement giving up any employment claims.  We can advise you on how to go about this and any aspect of handling redundancies.

Published: January 2012

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