Making One Person Redundant In A Small Business

Making one person redundant in a small business can be incredibly stressful for both the employer and the workforce overall. Following the correct procedure is absolutely essential, both to avoid legal proceedings and maintain staff morale.

Here, our specialist HR and employment law advisors explain, step by step, the process you should follow when making one person redundant in a small business to ensure your actions are legally compliant.

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Step One

• Check That You Are Entitled To Make The Employee Redundant

You can only make someone redundant if their situation is one of genuine redundancy, regardless of the size of your business.

The need to make redundancies can arise for a number of reasons, including the following:

The employee’s role has been taken on by other staff members following a reorganisation.
The part of the business in which the employee worked is ceasing to operate.
Your business is relocating.

Step Two

• Consider Whether There Are Any Alternatives To Redundancy

Making redundancies should always be a last resort, so you should carefully consider whether there are any alternative measures you could implement instead.

Examples of the measures employers sometimes use to avoid redundancies include moving the affected employee to a different part of the business, reducing their working hours, or suggesting a job share.

Step Three

• Check If There Is A Specific Procedure You Must Follow

If your organisation has a bespoke redundancy policy in place, you should follow the steps detailed in that policy.

Step Four

• Inform The Employee Whose Role Is Affected

You should explain your plans to the affected employee as soon as possible. It’s important to explain why you are considering making only their role redundant and talk them through your proposed procedure.

Step Five

• Hold Consultations

Any employer planning to make redundancies is legally obliged to hold consultations with those affected. The nature of the consultation required when you propose making less than 20 people redundant differs from that required when you propose making 20 or more people redundant.

Unlike the process involved in making 20 or more redundancies, there are no set time frames for consultations when making one person redundant. To be legally compliant, your consultation process need only be ‘meaningful’. This is still the case even when you only need to make one redundancy.

How long a ‘meaningful’ consultation should last depends on the circumstances. Sometimes, a consultation lasting a week might be adequate. Other times, you might need longer to consider all your options and make a fair decision.

During the consultation, you should explain to the employee why their role is no longer required. You should discuss plausible alternatives to making them redundant, if there are any, like redeploying them to a different part of the business or reducing their hours. You and the employee may need some time after the meeting to consider any alternatives that have been discussed.

Getting a redundancy consultation wrong places you at significant risk of an unfair dismissal claim, so speak to us if you’re unsure. We’ll guide and support you through the process, ensuring you do all you need to do to ensure your consultation is ‘meaningful’.

Step Six

• Draw Up Your Selection Criteria

Usually, you need to draw up fair selection criteria to select the employee to be made redundant. However, where the situation affects only one employee, for example because their role but no others have been automated, you need to be in a position to explain how that came about and why this made their role redundant.

Step Seven

• Give The Employee Their Notice

Your redundant employee is entitled to notice. You should let them know when their employment with you will end and inform them that they can appeal your decision if they wish. You should also go through the payments due to the employee and explain how you have calculated them, including redundancy pay.

How GAP HR Can Help With Making One Person Redundant UK

Making one person redundant in a small business poses a unique set of challenges. For example, when you aren’t selecting employees to make redundant from a pool, it can be more difficult to show that you followed a fair redundancy process. Being able to justify why just one role is affected by your proposals is crucial.

At GAP HR, we specialise in providing HR and employment law services to small businesses. Ee have a proven track record of keeping our clients tribunal free and will work closely with you to ensure your process for making one person redundant is fair and complies with all applicable laws.