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Employers: Conducting a redundancy process

As a result of the economy, changes in the business sector, changes in consumers’ needs and trends, competitors winning clients, business failure, business mergers or downsizing or changing an area of the business, an employer may have to make redundancies.

Conducting a redundancy process can be a complex procedure, as there are a number of specific steps that you need to take in order to avoid unfair dismissal claims. We can help guide you through the process to minimise your risks.

Conducting a fair redundancy process

Firstly, for a redundancy to be genuine, you must be able to demonstrate that the employee’s job no longer exists. It is not redundancy if you propose to recruit a direct replacement. It is also important that you identify how many redundancies you need to make and in what area (both in terms of location and job function) these should be.

You must adopt a fair procedure to determine what redundancies are required and to then carry these out. You also must consult with the employees at risk of redundancy throughout the process. The amount of consultation required will vary from situation to situation. You will need to identify a group of employees who are at risk and then draw up fair, objective selection criteria to select those who are to be made redundant out of that group. You will need to take care not to choose criteria that are discriminatory, such as criteria solely based on age. Don’t forget those members of staff on maternity leave or long-term sick leave when consulting with employees, and make employees aware of any alternative roles that may be available to them.

Payments on redundancy

Employees being made redundant will be eligible to certain payments. Those with over two years’ service will be entitled to statutory redundancy pay, which is calculated with reference to their age and length of continuous service. Employees may also be entitled to enhanced redundancy pay, and will need to either work their notice or be paid in lieu.

How we can help

We know that sometimes tough measures need to be taken to ensure the survival and profitability of your business. If you are considering making redundancies, our knowledgeable employment law team can help you plan effectively so that the process runs as smoothly as possible with the least disruption to your ongoing business. Our solicitors can offer pragmatic advice to help you achieve your commercial aims whilst ensuring compliance with your legal obligations. In addition, our HR specialists can be on hand to offer HR support throughout the process to ensure that you minimise the risk of any unfair dismissal claims.