HR Ready HR Consultants redundancy guidance

Redundancy Guidance

Sometimes it is inevitable that you need to reduce your workforce and in the current situation it is more common than not. If your business is considering making redundancies, then there are some things to consider and follow as mentioned below:

What is redundancy?

This is when you have no other alternative but to dismiss an employee as their job is no longer needed by the company. This may occur for a number of reasons such as the company is:

  • changing what it does
  • doing things in a different way, for example using new machinery
  • changing location or closing down

First of all, for a redundancy to be genuine, you must demonstrate that the employee’s job will no longer exist.

Redundancies can be either compulsory or non-compulsory.

What do I need to take into consideration?

As an employer you must follow a fair redundancy process and communicate clearly to your employees what is the reason for redundancy, why this is the only action that can be taken and how it will impact them including timelines. Depending upon the number of redundancies will depend on how long the process could take and also whether you will need to notify the Redundancy Payments Service using this form.

If you are making fewer than 20 employees redundant, there are no set rules to follow, however it is good practice to fully consult. Remember it is never just the employees that your need to consider when you are making redundancies, it is also showing the remaining employees that you have handled the situation properly.

If you are making more than 20 employees redundant in a 90- day period within your business then you must follow the ‘collective consultation’ rules.

The rules are as follow:

  • Notify the Redundancy Payments Service (RPS) before the consultation starts. Depending upon the number of proposed redundancies will depend on the deadline.
  • Consult with the trade union representatives or elected employee representatives. If none, then with the employees directly.
  • Provide information to representatives or staff about the planned redundancies, giving representatives or staff enough time to consider them.
  • Respond to any requests for further information.
  • Give any affected employees termination notices, detailing the agreed leaving date.
  • Once the consultation is complete, issue redundancy notices.

What are my employees’ rights?

Employees have rights when it comes to being made redundant, this covers:

  • Statutory redundancy pay
  • Reasonable time off to attend interviews and training during the process
  • Not to be unfairly selected for redundancy

Depending on the length of continuous service your employee has with your company will depend on how much statutory redundancy pay they would be entitled to receive. The government has a redundancy pay calculator that you can use.

What else can I offer my employees?

During the redundancy process many employees will offer:

  • Enhanced redundancy pay
  • Loyalty payments
  • Outplacement support

Not all of these are necessary, but it will depend on the amount of money and support you would like or are able to give to your employees.

The redundancy process can become quite complex and this article shares some points to consider. To ensure a fair process is followed and to mitigate your business risk, it is advantageous to seek out professional HR advice and support.

To discuss your HR needs or to arrange for us to come in and support you, get in touch.

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