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
- What P&O did wrong - There’s one employment law story dominating the headlines this week, and it’s P&O’s decision to sack 800 staff with zero notice. And in case you’re wondering what P&O did wrong, it’s NOT the fact that they made a business decision that they needed to let all of those staff members go – P&O have likely ... Read more
- Calm. Too calm. - We went through a redundancy process at a golf club back in July 2020. And it was all very calm. Too calm. There were several staff members at risk, including the club manager, and when that happens, it can be quite challenging – managers are much less inclined to play ball. Not this time though ... Read more
- Redundancy announcement script – general meeting - Why The Redundancy Announcement Script? A redundancy announcement can be a very hard thing to do. It is one of the most unpleasant tasks that you will have to do, telling staff that their position in the company is potentially no longer needed. Unfortunately, it is a task that nearly every employer will have to ... Read more
- Do I Have To Give Employees Redundancy Pay? - Yes! If you employ anyone, be it a cleaner, nanny, or sales person means that you have responsibilities under employment law.As is usual in law, ignorance is not a defence and will not protect you!You don’t need to pay redundancy to staff who have worked less than two years for you. You will obviously have to pay ... Read more
- Redundancy Costs (video and transcript) - Redundancy Costs (video and transcript) Costs of redundancy, so that you have this in mind is you need to do three weeks consultation. Which is a normal salary and you’re paying tax and national insurance on that. Plus, their notice period, which again, is their normal salary with tax and national insurance paid on it. ... Read more
- Voluntary Redundancy (video and transcript) - Voluntary Redundancy (video and transcript) To make the process a bit easier is to ask for volunteers a little red man there putting up his hand. Voluntary redundancies, so the way to get people to volunteer for redundancy is to offer them more than they would have got if they were made compulsorily redundant. So, ... Read more
- Redundancy pay - This applies to all staff over two years’ service. If staff have under 2 years they are not entitled to statutory redundancy pay. When you make an employee redundant, you need to pay them their notice period and statutory redundancy pay. Some employers also have an increased level of contractual redundancy pay, but they tend ... Read more
- Who Can They Bring To The Redundancy Meeting? - Solicitors in redundancy are always a hot topic – but you’re probably wondering where the law stands about this.. Can they bring a solicitor to the redundancy meeting? As you’d expect, we’re having a lot of conversations about redundancy at the moment, and if you’re sadly having to consider redundancy, then here are some must ... Read more
- Do I have to give employees redundancy pay? - Yes! If you employ anyone, be it a receptionist, sales person or nanny means that you have responsibilities under employment law. As is usual in law, ignorance is not a defence and will not protect you! You don’t need to pay redundancy to staff who have worked less than two years for you. You will ... Read more
- Announcing Redundancy To Staff - ”I have been made redundant before and it is a terrible blow; redundant is a rotten word because it makes you think you are useless.” Billy Connelly Picture the scene. You’re about to make a redundancy announcement to a staff member. You are seated at your desk when there is a knock at the door. ... Read more
As you’ve scrolled this far down this page, you might be interested in the redundancy announcement script :
