Restructuring
When times get tough, redundancy is sometimes necessary to keep your Company moving smoothly. Building a strong and dedicated team of employees takes time. Having to let personnel go can be difficult to handle emotionally, just as it can be difficult to handle in a professional sense.
Nonetheless, handing out redundancy packages could be the lifeline that keeps your business in business. And when the situation arises, it is important to make sure that you carry out the process in a fair and legally sound manner. If certain practices and requirements are not properly observed, your (ex-)employees could claim for unfair dismissal and discrimination.
Handling the redundancy process
When is the best time to do a redundancy process?
It is a good idea not to wait until after the summer holidays or Christmas. Those are times when people spend more than they normally would. If they have splashed out at Christmas thinking they have a job to come back to, the restructuring process will be that much worse than if you had given them a heads-up and shouted the employment law equivalent of “fore!” to make them aware that something unpleasant is heading in their direction.
General Meeting
If you propose to dismiss fewer than 20 employees, then you do not have to follow a statutory redundancy process. However, under case law, three weeks consultation period is currently considered “fair,” and you would have to prove extenuating circumstances to have a shorter consultation period.
Here is an overview of the timeline you will need to follow to have a fair process:
| Day 1 | General Briefing Meeting |
| Day 1 / 2 | First individual Consultation Meetings |
| Day 6 | Deadline for application for voluntary redundancy |
| Day 6 | Deadline for applications for available roles |
| Day 6 | Deadline for suggestion and feedback |
| Day 7 / 8 | Interviews and consideration of suggestions and feedback |
| Day 9 / 10 | Second Individual Consultation Meeting |
| Day 15 | Final Consultation Meeting and termination date |
The general meeting with staff takes place on day one of the process (face-to-face or on Zoom, either is fine). This is usually on a Monday, or if we have to get staff in specially, invite them on a Monday, and have the meeting on a Tuesday.
Prepare a script for the general meeting so that you don’t say the wrong thing by mistake. “You are being made redundant” is not the same as “You are at risk of being made redundant.”
Please also forget the advice “Best to get it over with as soon as possible, like pulling off a plaster!” Change takes time to get used to, and bad change more time. You, as the employer, may have had time to deal with the situation, but the staff, however much they have been suspecting the bad news, will be shocked by it. You have to, morally and legally, give them time to absorb the bad news, the implications it has for their jobs and lives, and give them time to think about their next steps.
And whatever you do, do not cry in any of the redundancy meetings. A boss of mine once did, claiming “it was the worst day of his life, having to make staff redundant,” whilst blubbering on the other side of the desk. I was the one being made redundant; I was the one without a job, the one who could not pay her bills next month, not him.
The focus is on them and what they need, not you.
Before you read on, it may be helpful for you to know if it’s actually worth going through redundancy
This is a formula worked out by the CIPD to show companies that making “knee jerk” redundancies is not necessarily the easy and cheap way out of a financial bind.
(n ×R) + (x ×H) + (x ×T) + ny(H + T) + Wz(P – n)
Where:
- n = number of people made redundant
- R = redundancy payments
- x = number of people subsequently hired
- H = hiring costs
- T = induction/training cost
- y = percentage quitting post redundancy
- W= average monthly staff salary
- z = percentage reduction in output per worker caused by lower morale
- P = number of people employed prior to redundancies
- PILON Redundancy - PILON stands for ‘payment in lieu of notice’. PILON redundancy refers to situations in which an employee who has been made redundant stops working for you immediately, but you still pay them for their notice period. As an employer, if you do not adhere to your legal obligations relating to PILON by, for example, failing ... Read more
- 2nd Consultation Meeting Redundancy - When considering making redundancies, you must follow a fair and legally sound process. What will be deemed ‘fair’ depends on several factors, including how many employees’ roles are affected by your proposals. Whatever process you follow, consulting with the affected employees is crucial. The consultation process often involves several meetings with the relevant employees or ... Read more
- How To Make Someone Redundant - Making employees redundant is a hard but sometimes unavoidable part of running a business. Employment law imposes strict obligations on employers making redundancies, and its crucial to understand how to make someone redundant fairly and in line with your legal duties to avoid facing employment tribunal proceedings. At GAP HR, our team of HR and ... Read more
- Consultation Period For Redundancy - The consultation period for redundancy is a crucial aspect of the redundancy process. As an employer, it is vital to understand your obligations in respect of consultation and adhere to them. If you don’t, the employees selected for redundancy may have cause to bring an unfair dismissal claim against you. At GAP HR, we specialise ... Read more
- Redundancy Process Timeline - The nature of the redundancy process relevant to any given situation depends on several factors, including how many employees are likely to be affected by your proposals. If you are considering making redundancies and are unsure of your legal obligations, taking advice from expert HR specialists like ours will ensure your processes are fair, justifiable, ... Read more
- Redundancy Process For One Employee - As an employer, you must adhere to various laws and regulations aimed at ensuring you treat your staff fairly, including when you are planning to make redundancies. The rules that apply to the redundancy process for one employee differ from those that apply when you are planning to make 20 or more employees redundant. Here, ... Read more
- Redundancy Consultation Meeting - A redundancy consultation meeting is a key part of the redundancy process. If you do not properly consult your employees in a redundancy situation, any subsequent redundancies will likely be deemed unfair, and an affected employee may commence tribunal proceedings against you for unfair dismissal. At GAP HR, we specialise in providing HR and employment ... Read more
- How Much Is Redundancy Pay UK? - When considering making redundancies, its crucial to understand the intricacies of redundancy pay. Employees often ask, ‘How much is redundancy pay UK?’ As an employer, having a clear understanding of your obligations regarding redundancy pay not only equips you to provide accurate information to your employees, but also ensures you avoid an employment tribunal. At GAP ... Read more
- When Should I Receive My Redundancy Payment UK? - When you make an employee redundant, you may need to pay them redundancy. Specific rules and regulations govern redundancy payments, and as an employer, it’s essential to understand those rules to avoid inadvertently falling foul of them and ending up before an employment tribunal. A question often asked by employees who have been made redundant ... Read more
- Minimum Redundancy Pay - If your organisation needs to make redundancies, the affected employees may have the right to redundancy pay. The minimum redundancy pay depends on the employee’s age and how long they have worked for you. It’s essential to calculate an employee’s redundancy pay correctly and pay it on time. If you don’t, the employee may issue ... Read more
As you’ve scrolled this far down this page, you might be interested in the redundancy announcement script :
