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.
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:
General Briefing Meeting
Day 1 / 2
First individual Consultation Meetings
Deadline for application for voluntary redundancy
Deadline for applications for available roles
Deadline for suggestion and feedback
Day 7 / 8
Interviews and consideration of suggestions and feedback
Day 9 / 10
Second Individual Consultation Meeting
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)
- 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
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