How do I make redundancies?

Q. I need to make 19 employees redundant.   Is there anything I should know before I do so, to avoid liability?

A. Firstly, make sure that no one has been dismissed by reason of redundancy in the last few months. If the number of people you intend to dismiss by reason of redundancy in a 90-day period reaches 20 or more, you will need to enter into collective consultation. You will also need to notify the government of your intentions. I’ll assume here that you have not triggered the collective consultation obligations.

Next, decide on the pool of those at risk of redundancy. This will depend on your business, but broadly speaking, each pool should consist of people who are carrying out similar work and/or whose roles are broadly interchangeable.

If you need to select a proportion of the members of a pool, use fair and (to the extent possible) objective criteria and apply those criteria fairly and consistently.  You should:

•    consult any appropriate employee representatives about your proposals and the proposed criteria before starting the selection process;•    consider using two managers to assess each of the individuals in the pool to avoid personal bias;•    use pre-existing documents, such as appraisals, when assessing people wherever possible;•    not rely solely on the principle of ‘last in, first out’, or you may face claims of age discrimination;•    not count any sickness absence relating to someone’s pregnancy or their disability when assessing someone’s attendance record; and•    consider whether any reasonable adjustments can be made to the redundancy process itself if a potentially redundant employee is a disabled person.  

When an individual has been selected, you should:

•    give them written reasons why you are considering the need for redundancies, explain why they have been selected and provide them with a copy of their scores, if relevant, and invite them to a meeting;•    give them the opportunity at the meeting to comment on the proposed redundancy and ask questions;•    consider any alternatives to dismissal they may suggest, such as job shares, etc;•    try to find alternative employment for them elsewhere in the business – check for vacancies across the whole group (if relevant) throughout the consultation process;•    allow for a period of consultation before making any final decision. Keep an open mind throughout this period and respond properly to any proposals put forward by the employee;•    write to the employee at the end of the consultation process, confirming your decision and offering the opportunity to appeal.

After April, employers will not face findings of automatic unfair dismissal if they do not give written reasons for the proposed redundancy situation prior to the first meeting as the law is changing. Similarly, they do not need to offer the right to appeal. However, you would be well advised to follow the current procedure in any event: written reasons could (if well drafted) be valuable evidence when establishing a genuine redundancy situation and appeals are a much cheaper way of identifying mistakes than litigation. It also allows you to identify who is most likely to bring a claim.

Related articlesHow do I lay off staff?Reducing headcount the smart wayUnfair dismissal claims on the riseWill Winch is a solicitor in the employment group at Mishcon de Reya.

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