Redundancies & Business Reorganisations Solicitors York, Wetherby & Malton
Making redundancies is a tough decision for any employer to make. If the situation becomes unavoidable, an employer will need to manage employee relations, whilst ensuring that it has a robust procedure in place for handling redundancies. Failure to do so could render subsequent employee dismissals unfair and result in claims being pursued.
The five key areas for employers to consider when proposing redundancies for less than 20 employees are set out below.
Initial meeting, warning of redundancy
The employer should meet with all the potentially redundant employees to explain how many jobs are at risk of being redundant and the reasons for this. In particular:
- Redundancy should be presented as a possibility only at this stage (to avoid any claim that the decision has already been made).
- The employer should also explain the alternative to redundancies that it has considered and why these do not appear to be viable. The employees should be asked to let the employer have any suggestions they have of to avoid redundancies. The employer should confirm that it will continue to look at ways to avoid redundancy, including offering employees alternative roles within the organisation.
- The employer can consider asking for volunteers for redundancy at this meeting.
The employer should explain the selection criteria it intends to use for selecting the redundant employees, if redundancies are unavoidable, and ask for any comments on them.
The content of the meeting should be confirmed in writing to each potentially redundant employee.
After an initial meeting with relevant employees and any individual meetings where appropriate, the employer will need to mark each of the potentially redundant employees according to the selection criteria. It is best if two managers separately undertake the scoring exercise for each individual to help ensure that the marks are objective.
Invitation to consultation meeting
Once the markers have established the identities of the potentially redundant employees, the employer should write to each of them advising of their provisional selection for redundancy and inviting them to a consultation meeting. It is recommended that they should be allowed to be accompanied by a trade union representative or colleague at this meeting. The letter should be reasonably detailed and should set out:
- The reasons for the redundancy.
- The individual's scores and how they were arrived at.
It should make clear that the selection for redundancy is subject to consultation at the meeting, that no final decision to dismiss them has been made at this stage but that there will be time for consideration (and further investigations, if necessary) afterwards, with a further meeting being scheduled after that. The employee should be given sufficient time between receipt of the letter and the meeting to enable them to consider their response.
Consultation meeting (with each individual)
At the meeting, the employer should consult with the potentially redundant employee about their scores, the proposal to select them for redundancy and the terms of the redundancy. If they have decided not to bring a work colleague or trade union representative with them, the employer should confirm with them at the beginning of the meeting that they are still happy to proceed without a representative. Their response, particularly in relation to their scores, should be considered and discussed at the meeting. The employer should also make a detailed note of the meeting.
The employer should follow up any suggestions the employee has made to avoid their redundancy, and consider any representations they have made in relation to the scores. If, on further consideration, the employer decides to increase the employee's scores, it will need to check the scores of the other employees in the pool to see if the employee in question still falls below the cut-off point for redundancy selection. Once a final position has been reached, the employer will need to send a letter inviting those employees who are now below the cut-off to a further consultation meeting.
Can the employer offer alternative employment?
It is important to consider any alternative employment vacancies which are available, not only in the company, but also in any associated company as soon as the employer is aware that redundancies may need to be made.
At this stage in the process the employer needs to be in a position to confirm whether any other roles can be offered to the employees and be able to provide details of the roles to them. It may be that, in order for the employee to be suitable for such posts, some retraining is necessary. If there are any available posts on a lower grade with less responsibility, the employer should also discuss these with the potentially redundant employee, even though the employer may feel certain that they will not accept the offer.
It may be possible to offer alternative employment to an employee who has been selected for redundancy before the termination of their employment is confirmed and they are given notice of dismissal. However, the duty to look for alternative employment continues after notice has been given and until the employee leaves.
Meeting (with each individual) to confirm outcome
The employer will need to meet those employees with the lowest scores and who have therefore been identified as the employees to be made redundant at a further individual consultation meeting. Again, it is recommended that the employee should be allowed to be accompanied by a trade union representative or work colleague. At each meeting, the employer should confirm to the employee that they have been selected for redundancy.
The employer should go through the redundancy package with them (which should include any enhanced redundancy payment, if appropriate) and inform them of their right to appeal against the decision. Again, the employer should make a detailed note of this meeting.
Written confirmation of redundancy dismissal
After the meeting, the employer should write to each of the redundant employees concerned setting out the decision to make them redundant and notifying them of their right to appeal the decision. The letter should confirm whether the employee will be working out their notice, spending it on garden leave, or receiving a payment in lieu. It should also set out in writing the calculation of their redundancy pay. If the employer has a policy in relation to appeals, the employer should make sure that this procedure is followed. It is usual to set a period of time within which the employee must make their appeal (for example, within five days). If possible, the appeal should be to a higher level of management than the original decision-maker.
If the employee wishes to appeal, the employer should invite them to an appeal meeting. It is recommended that the employer should allow a colleague or trade union representative to accompany the redundant employee at this meeting. Following the meeting, the employer should write to the redundant employee informing them of the outcome of the appeal and confirming that this is the final. The letter should also confirm the basis for the calculation of payments made to the employee, including the statutory redundancy calculation.
Time off to seek alternative employment
An employee who is given notice of dismissal by reason of redundancy has a right to take a reasonable amount of time off with pay during working hours to seek alternative employment or to arrange training for future employment, provided they will have two years' continuous service at the termination date.
General points to consider during the redundancy process
- Ensure there is someone available to answer any employee queries. Redundancy is an uncertain time for employees and it is helpful if the employer can arrange for someone to be available throughout the consultation period to answer any queries raised by employees as and when they arise.
- Consider other support for employees. On a larger scale redundancy exercise, consider producing "Question and Answer" sheets for employees to assist the consultation process. Also, explain to employees that they have a right to time off to look for alternative work and consider speaking to the local job centre and offering assistance with their CVs.
- Consider a settlement agreement. If the employer is proposing to make an ex gratia payment to employees in addition to any statutory or contractual entitlement, it is sensible to consider making such payments conditional on their entering into a settlement agreement, so that the employees have no further claims against the employer. However, employers should note that a settlement agreement requires the redundant employees to obtain independent legal advice in relation to their dismissal in order for the settlement agreement to be legally binding.
Contact our Redundancies & Business Reorganisations Lawyers in Yorkshire
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