REDUNDANCY is a difficult issue for both employer and employee, and managing the process needs to be handled both sensitively and delicately.
A recent survey by the TUC found that more than one in ten employees is not sure they will still be in their jobs in a year’s time. And with employment lawyers and legal helplines also reporting a sharp rise in businesses seeking advice on issues on
the topic from the employer’s side, there has never been a greater need for employers to be aware of the relevant legal framework.
If the redundancy process is mismanaged, employers can walk into a minefield of costly and time-consuming problems. It is a sensitive process and it is easy for businesses to fall foul of employment laws. If employers fail to follow proper procedures, they run the risk of potentially costly and damaging tribunals. Dismissing employees for a sound financial reason will not be enough to avoid legal claims, and under UK employment law, employers must show that they have acted reasonably and followed a proper process.
Where there is a reduced or diminished requirement for certain employees, a crucial consideration should be whether those employees are in a pool for selection for redundancy or whether they are in a unique post.
Employees in a pool for selection are those who do the same jobs or those whose roles are interchangeable. So if an employer has, say, five employees carrying out a particular role and he finds he now needs only three, all five would be in the pool for selection.
The employer should draw up objective selection criteria – such as skills, knowledge, productivity, attendance and disciplinary records – and score all five employees against the criteria in order to select the two at risk of redundancy.
In order to ensure objectivity, scoring should be backed up, wherever possible, by a paper trail supporting the judgement. An employer should take great care to identify the correct pool for selection, and in some circumstances this will include pooling staff across more than one location. Likewise, where an employee is in a unique post, consideration should be given to whether that is the case. Might there be someone else with a different job title who, in reality, does the same work?
A key factor for employers in any redundancy programme is advance preparation. Where there is a proposal to dismiss 20 or more employees at one establishment within a 90-day period, collective redundancy consultation obligations will apply.
These include consultation with trade unions or employee representatives about the detail of the redundancy programme and this must all take place before discussions with individual employees. The obligation to begin collective consultation starts as soon as the employer formulates his intention or proposal to make dismissals.
Employers can be challenged for waiting too long before opening formal communication channels with trade unions or employee representatives.
If the proposed number of employees is less than 20, collective consultation obligations will not apply. Nevertheless, analysis of the employees’ roles and the work they do at the redundancy planning stage cannot be underestimated.
The process doesn’t end there – an individual consultation must also comply with statutory dismissal procedures.
Employers should not forget alternative employment opportunities. A common mistake is to assume that employees would not be interested in other roles within the organisation. This is particularly the case where those roles are at a lower salary and have less responsibility.
While in many cases that assumption may be correct, the employee will have grounds to challenge the redundancy consultation process if they are not told about any alternative opportunities.
For employers and employees the redundancy process can be an emotional one, but if managed sensitively and in the most appropriate manner, the impact on both parties can clearly be minimised.
• Jacqueline McCluskey is head of employment at HBJ Gateley Wareing.
• HBJ Gateley Wareing will hold a breakfast seminar on 24 September about managing redundancies. To reserve a place, register at
www.hbjgateleywareing.com The full article contains 684 words and appears in The Scotsman newspaper.
