HR & Employment Law Insights

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Redundancy conversations need to be dealt with sensitively.

There are many successful businesses that at one time or another have to face making some redundancies, whether it's through a temporary downturn in business trade or simply because they have opted for a change in direction.

With the economic climate squeezing the finances of much of the nation, SMEs have been feeling the strain more than ever and an increasing number have either had to reduce working hours or axe some staff.

We take a look at some of the basics in handling redundancies and how to tackle a difficult situation professionally and sensitively.

A difficult time

Whether an employee loves their job or simply tolerates it, being told you are at the risk of redundancy can come as a real jolt. For many people, a job is more than simply a means to pay the bills, it provides a social life and in some cases, a real sense of identity.

Therefore, no matter what the reason, giving out the news that redundancies may be required will always be a difficult task to face.

As an employer it's imperative to take a step back and think about the underlying psychology of employees; this will become increasingly important as the week's pass, especially if some become difficult at times. Understanding what they are going through and working out how to best support them through a difficult experience is your responsibility.

Be aware that as soon as you announce the news, there will be an influx of questions, many of which you may not be immediately able to answer. It's essential to be prepared for this and to know how you will deal with this in a sensitive and professional manner.

The rights of employees

As a business, you are able to handle redundancies in the way you want but there are certain rights which your employees have.

To start with, you must explain to them the reason for the redundancies, how many positions are being terminated, how staff will be selected for redundancy, and how the eventual cessation of employment will take place. Staff should also be informed about how much money they would be entitled to receive or a calculation of how to work it out for themselves. All of this information should be provided in writing.

Staff have the right not to be unfairly nominated for redundancy, even if you don't really like them; this isn't a chance to get rid of anyone you choose.

If more than 20 members of staff are to be made redundant at one location over a period of time of 90 days or less, there must be a collective consultation before the final decision is reached. This consultation must occur at least 30 days before the first redundancy if there are less than 100 staff leaving, or 45 days before if there are 100 staff or more being made redundant.

It is an excellent idea to have a redundancy policy set out in the employee handbook as this can help make the process clearer if the need arises.

Selecting candidates for redundancy

Once you have decided that redundancies are required, the next step is to work out the criteria on which you will be basing your decision.

As mentioned above, redundancies do not mean that you can simply axe members of staff who are difficult to manage or that you simply don't get along with as well. Every employee has the right to a fair selection process and if you breach this right you could end up facing a tribunal.

Staff must be informed about how you will be making your decision and the final criteria must be applied, without exception, in an unbiased and consistent manner.

The final choice is up to you but some of the factors you may wish to consider include:

  • Skills and experience
  • Attendance record - but you may also wish to examine reasons for absence. A hospital admission, for example, may mean an individual appears to have a poor record but they may never have had another day or before or since. Numbers of periods of absence may, therefore, be a better way to assess this, rather than simply the total number of days.
  • Disciplinary record. Ensure this is 100% up to date before using this.
  • Standard of work.
  • Aptitude and range of knowledge

Breaking the bad news

Explaining the decision in person may seem like a difficult approach but this is almost without exception the only way you should ever consider breaking such potentially devastating news. Be prepared for plenty of questions and a range of emotions, depending on the member of staff.

Technically, the decision does not have to put in writing but it is highly recommended that you also provide a letter which confirms all of the pertinent details. This is because there is a very high chance that the individual may not remember much of what they are told, given the high emotions of the situation.

The minimum requirement for a redundancy payout is two years continuous service but an appeal for unfair dismissal can be heard once there have been 12 months continuous service. However, if the case is being brought as a result of redundancy based on a statutory requirement, there is no minimum length of service.

Even though the individual may be leaving your company shortly, consider how you can help support them in the meantime. Perhaps CV writing courses might help, or what about a crash course on how to use PC programs for those who aren't terribly computer literate?

It's these kinds of small details which in years to come may be appreciated by those who had to leave.

Conclusion

Redundancies are never a pleasant thing to face but for more companies, than ever they are an unfortunate fact of business. Whilst the process may be painful, by acting in a sensitive, considerate and professional manner throughout, you will be making the whole situation far easier, even if it doesn't feel like it at the time.