Myriad HR Newsletter

Managing Redundancies

What do you need to remember?

What is the definition of redundancy?

A genuine redundancy only arises when either there has been or is going to be:

• A cessation of business.
• A cessation of business at the employee’s site.
• A reduction or cessation of work.

Ensure the redundancy process in planned effectively:

• Give opportunities for meaningful consultation even if only a few roles and role holders are impacted.
• Permit the employee who is ‘at risk’ of redundancy to bring a colleague with him/her to the consultation meetings.
• Use objective selection criteria – some criteria are likely to be unfair e.g. last in first out.
• Ensure compliance with the 3 stage statutory dismissal process – this can just be incorporated into your consultation & meeting plans.
• Give the opportunity to appeal.
• Consider suitable alternatives.
• Give help with finding other jobs.

Consultation:

• Best practice suggests consultation is the best way forward with all employees who may be at risk of redundancy.
• There are specific legal requirements if you wish to make 20 or more role holders redundant & consultation must commence at least 30 days before the first dismissal takes place. The time scale increases to 90 days for redundancy plans involving more than 100 dismissals. It is important to seek specialist advice before taking any action.
• The Department of Trade and Industry must be notified if wide scale redundancies involving more than 20 staff are planned.

Redundancy payment:

• The current weekly statutory maximum is £330 but some companies offer enhanced company schemes.
• The maximum length of service that can be taken into account is 20 years.
• Only employees with 2 or more years of service are eligible for statutory redundancy pay. Ensure you consider notice period when calculating the 2 years notice.

Avoiding redundancies:

• Stop recruiting or implement a process to ensure recruitment is only undertaken when absolutely necessary.
• Terminate temporary agency workers.
• Reduce or eliminate overtime.
• Redeploy people to jobs which are vacant – with their consent.