Redundancy

You may need to restructure or reorganise your Business and sadly this may involve some Employees losing their jobs.
This may be because you are having to

  • stop trading from one site or stop trading completely
  • increase output at another site
  • or just reduce the number of people you employ to help your Business survive the economic pressures it faces

Consultation

If you are proposing 20 or more redundancies at one site then you must carry out formal consultations over a 90 day period with a recognised Trade Union or Employee Representatives. You will have to follow a set time table for these consultations.

This is good practice even when these formal requirements do not apply. Consulting with Employees or their Representatives will be beneficial to all involved in the process.

Previously, where a new Employer ws proposing to make 20 or more Employees redundant they could not start the consultation period until the transfer had taken place and they had become the Employer. Since 2014 if the Transferor consents, the Transferee may consult representatives of affected transferring Employees about proposed dismissals before the transfer takes place. That period of consultation will count towards the 30 or 45 day consultation period meaning that redundancies can be effected at an earlier date, provided that consultaion has taken place.

Selection

In all restructuring situations, irrespective of the numbers involved, you must

  • carry out a Selection Procedure using objectively fair criteria to ensure the correct Employees are selected for redundancy
  • consult individually with each of those Employees
  • consider whether or not you can offer the selected Employees suitable alternative employment and allow them rights reasonable time off to find new work
  • compensate your employees for their dismissal with a tax-free sum that proportionately reflects the length of service they have given to your Business, provided they have been working with you for more than two years.

If you get any of this wrong then you could end up defending Employment Tribunal Proceedings so it is better to consult us at the very outset so that you can discuss with our specialist advisers

  • the situation you face
  • all your options and which is the most cost effective
  • the selection procedure to follow
  • the entitlement Employees may have
  • the steps you must take to consider suitable alternative employment for the Employees involved

A redundancy may count as unfair dismissal if unreasonable criteria have been used to select the Employee made redundant. For the redundancy to be fair, you must have created a justifiable set of criteria which are used to select the employee or employees to be made redundant e.g.

  • length of service
  • skills
  • qualifications
  • or disciplinary proceedings

You must then apply these criteria rigorously and without bias to all the Employees being considered for redundancy.
If you can be shown to have selected an Employee for redundancy using irrelevant or unjustifiable criteria – for example for reasons relating to age, sex, race or disability, then you would be regarded by an Employment Tribunal as not having carried out the selection process in a fair manner, and there is every likelihood that the redundancy would be classed as unfair dismissal, with all the legal & financial consequences that entails. You may also be faced with a discrimination claim.

As well as redundancies, you may need to consider other measures such as invoking mobility clauses in Contracts of Employment to move Employees to alternative premises, or negotiating with Employees to change Terms and Conditions of employment. Before making such changes you should contact us to ensure that by doing so you will not breach the Contract you have with those Employees.

We can guide you through the process of re-structuring or re-organising your business to help avoid claims for unfair dismissal, constructive dismissal, discrimination and breach of contract claims. Your Team includes Chris Blackburne, an experienced HR Director who you can engage to work for you in house to guide you through the difficult and complex restructuring process.