Redundancies

What is a redundancy?

A redundancy is dismissal due to the actual or intended closure of the whole business, or the business at a particular workplace; or; a reduction in the need for employees to carry out work of a particular kind. Reasons for redundancy may include the need to reduce costs / overheads, a downturn in the amount of work, or a business reorganisation or restructure.

What process do I need to follow?

To defend against costly unfair dismissal claims you must at the very least:

Establish a genuine redundancy situation

You must know from the outset the reason for the redundancy and be able to demonstrate a genuine need to make redundancies.

Fairly select the employees to be dismissed

If you are selecting from a group of employees you will need some form of selection criteria. Commonly used criteria include Skills Matrices, and Performance-Based Selection Criteria.

Consult with them before proceeding with the dismissal

The purpose of consultation is to give the employee an opportunity for the employee to put forward alternative proposals to avoid redundancy situation or to have their say on the selection criteria.

Consider alternatives to redundancy

If suitable alternative work is available within the company, it should be offered to the employee.

Pay statutory and contractual redundancy entitlements

An employee made redundant may receive different categories of money. Entitlements may include Statutory Redundancy pay, pay in lieu of untaken holiday, pay in lieu of notice and ex-gratia severance payments.

Redundancy dismissals are complex and there are many pitfalls for an inexperienced employer. Mistakes can be costly - seek expert advice if you are unsure. Bibby Consulting & Support can provide advice tailored to your circumstances.

The above is intended to provide information of general interest about employment law but does not give legal advice.