Making someone redundant is never an easy experience for any employer. Losing your job can be a devastating blow, both financially and emotionally.
It can be difficult to see a way forward, especially if you have been in the same job for a long time. However, there are some things you can do to make the process easier.
When it comes to making redundancies, compassion is key. First and foremost, it’s important to remember that this person is not just a number or a cog in a machine – they’re a human being with their own unique set of experiences, skills and emotions.
Redundancy can be a hugely stressful and destabilising experience, so it’s important to handle it with care. Make sure you take the time to meet with the person face-to-face, explain the situation clearly and give them as much notice as possible.
Try to be understanding and sympathetic, and avoid using any language that could come across as cold or uncaring. If you handle the redundancy process with compassion, you’ll not only make it easier for the person affected, but also demonstrate your own humanity and decency.
What is redundancy?
Redundancy is when an employer terminates an employee’s contract of employment because they no longer require somebody to do that job. Redundancies can be compulsory (where the employer has no choice but to make redundancies) or non-compulsory (where the employer has a choice about making redundancies, for example, where there is a shortage of work). In either case, the law requires employers to follow a fair procedure before dismissing somebody for redundancy.
This usually involves consultation with employees and their representatives, and selection for redundancy on objective grounds. If an employer does not follow a fair procedure, an employee may have a claim for unfair dismissal. Making someone redundant can be a difficult decision for an employer to make, but it is important to remember that it is not personal and there may be good reasons for it.
For example, if a business is struggling financially, it may need to reduce its workforce in order to stay afloat. Sometimes, redundancies can be avoided altogether if employers are willing to consider alternatives, such as voluntary redundancy or early retirement. However, this is not always possible or realistic. Ultimately, whether or not making someone redundant is the right decision will depend on the individual circumstances of each case.
Is making someone redundant the only option?
Making staff redundant is one of the most stressful experiences a person can go through. Not only is it a major financial setback, but it can also be a huge blow to your self-confidence. If you’ve been told that your job is at risk, it’s important to explore all of your options before making any decisions.
Although making someone redundant may seem like the easiest option for the employer, it’s also worth considering alternatives such as reducing hours or offering early retirement. By taking the time to explore all of the options, you can make sure that you make the best decision for both yourself and your family.
Here are some of the options to explore:
- Seek government support.
- Hold negotiations with employees and agree on a short-term cut in salary and hours.
- Offer staff members unpaid leave until your business’s economic situation improves.
- Restrict overtime and withdraw non-contractual benefits.
- Redeploy current employees , they can be offered new roles instead of making them redundant.
- Cut back on other costs – during any period of financial hardship, businesses should stick to what is strictly necessary in order to survive. During the redundancy process its simultaneously for businesses to be recruiting while considering making current employees redundant.
In order to prevent compulsory redundancies, some changes may need to be made that require employee consent. To obtain this support, it is advisable to explain the financial situation the business is facing. Be transparent about the measures being implemented and let employees know that these are only temporary.
Reassuring employees that their jobs are not at risk is key to obtaining their consent. While difficult conversations may need to be had, communication between leadership and employees will be an asset during this time. Only by working together can a business hope to weather the storm.
Before you start the process of making people redundant, every possible alternative should be explored in order to prevent job losses. The best outcome for the business and employees would be the ability to retain your current team.
What alternatives are there to redundancy?
As explained every avenue should be explored before redundancies are made, here are alternatives to redundancy.
Seek government support
When facing financial difficulties, it’s important to explore all of your options. One of the first places to start is by checking to see if any government support is available. Depending on your situation, there may be a number of programs that can help you get back on your feet.
For example, during the COVID-19 pandemic, the government announced a Coronavirus Job Retention Scheme. This was designed to support businesses so they could continue to pay a percentage of wages despite interruptions to usual business activity. If you’re facing financial hardship, it’s worth investigating what kind of support might be available to you. Taking advantage of these programs can help you get back on track and make ends meet.
Facing the prospect of a decrease in demand or revenue, many businesses have been forced to consider cutting costs in order to stay afloat. One way to achieve this is by reducing the hours worked by employees. This can be done through negotiation on an individual basis, or by offering a period of unpaid leave.
The latter option was unfortunately necessary for some businesses during the recent Coronavirus pandemic. Although neither solution is ideal, they may be necessary to prevent layoffs and keep the business running until conditions improve. One such measure is reducing working hours. This can be a difficult decision to make, as it can have a significant impact on employees. However, if redundancy is not an option, then reducing working hours may be the best course of action.
Employees may be reluctant to accept such a change, but if they understand that it is necessary to protect jobs, then they may be more willing to do so. Quality communication between employer and employee will be crucial in making this happen. Other alternatives to redundancy such as restricting overtime, freezing recruitment, and withdrawing non-contractual benefits should also be considered.
Making team members redundant is one of the most obvious ways to reduce staff costs. If you don’t need overtime, you can stay on budget and avoid redundancies by keeping employees to their contracted hours and salary. To do this legally, check whether your employees have a contractual entitlement to overtime.
This may be an unpopular decision, especially if staff members have come to depend on the extra salary that they receive for working overtime. To smooth over the situation, it’s best to explain the situation with openness and honesty. Employees will be much more understanding if they realise this measure is being enforced to avoid redundancies.
If they don’t, you can restrict this or remove it entirely to reduce staff costs. If they are entitled to overtime, get the consent of your employees to make this change. Doing this will help you save money and avoid having to let people go. In addition, it may be worth offering some kind of compensation, such as flexible working hours or additional holiday entitlement. By taking these steps, you can help to ensure that your employees are onboard with your decision to cut back on overtime.
Freezing recruitment is a necessary requirement for any business that is in a period of economic difficulty. Many businesses are facing difficult times at the moment, and it may not be possible to offer new employees the same level of job security or salary that they might have expected. Retracting job offers now will avoid disappointing candidates later on, and it shows that you are committed to being honest with potential recruits.
It is also important to reassure candidates that you will be in touch if the situation changes, as this will help to maintain a good relationship with them. In these challenging times, it is more important than ever to look after your business’s reputation. One of these decisions when freezing recruitment is often redeploying staff to new departments or roles. This can be a difficult process, as it usually means changing an employee’s contract and job description.
Of course, if their job description is intrinsic to their contract, this change will have to be negotiated directly with the employee. An employee who likes their current role may be hesitant to transfer to a new department or undertake new responsibilities. However, if they understand that the alternative to this redeployment offer is redundancy, they’re more likely to understand and agree to the change.
Redundancy is always a last resort for businesses, but sometimes there is simply no other option. In these cases, it’s important to handle the situation sensitively and fairly. Employees should be given as much notice as possible, and should be given the opportunity to apply for other roles within the company before being made redundant.
Withdraw non-contractual benefits
As the economic downturn continues, many businesses are looking for ways to reduce costs and protect jobs. One way to do this is by withdrawing non-contractual benefits, such as bonuses and other incentives. This can be a difficult decision to make, but it may be required to keep the company trading solvently.
It’s important to ensure that these benefits are truly non-contractual; if they’re considered an entitlement under the terms of your employees’ contracts, you’ll need to obtain their consent before withdrawing them. With careful planning and communication, though, you can make the necessary cuts without jeopardising your relationship with your employees.
If your business is in this position, you may need to communicate some bad news to your staff. Although it is natural for people to be disappointed by the loss of benefits such as health insurance or free parking, you can reassure them that these measures are only temporary.
Employees who understand the financial situation of the business are more likely to appreciate why these changes are being made. In the meantime, try to focus on the positive aspects of working for your company, such as flexible hours or good working conditions. By maintaining a positive attitude, you can help to minimise the impact of these changes on your employees.
What is the redundancy process in the UK?
The redundancy process in the UK is a process by which an employer can legally terminate the employment of an employee. The process is typically used when an employer needs to downsize or restructure their business. In order toreduce their workforce, employers must first consult with employees and trade unions.
If there are no suitable alternative positions available, the employer can then choose to make employees redundant. Employees who are made redundant are entitled to certain statutory payments, such as notice pay and redundancy pay. The redundancy process can be complex, so it is advisable for employers to seek legal advice before proceeding.
Here is the redundancy process step by step.
Warn employees of the risk of redundancy
The first thing to do is to give employees as much notice as possible that redundancies are being considered. This way, employees have time to mentally prepare for the possibility of losing their job, and they can also begin to look for other employment options. In some cases, employees may even nominate themselves for redundancy, which can help to make the process more efficient. Ultimately, while redundancy is never an easy process, informing employees in advance is the best way to minimize disruption and ensure that everyone is treated fairly.
Anytime a business is considering layoffs, it’s a difficult and anxious time for everyone involved. If you are in a position to have to make this announcement, it’s important to be as thoughtful and sensitive as possible. This means fully explaining the economic situation of the business and why redundancies are being considered.
Employees will undoubtedly have questions and concerns, so being prepared with answers will help to ease some of the anxiety. It’s also important to be clear about the process – who will be impacted, how decisions will be made, etc. Being upfront and honest throughout the process will help to create a sense of transparency and trust. Although it’s a difficult time for everyone, handling the situation with care and sensitivity can help to make it a little bit easier.
Identification the redundancy pool
Although there are no hard and fast rules when it comes to identifying your redundancy pool, you will need to be able to show that your decision was reasonable given your specific circumstances. Otherwise, an employee could launch an appeal.
A good way to start defining your pool is to consider what particular type of work is disappearing. For example, if your business remains in high demand but nobody is using your telephone customer service, then it would make sense to focus on employees whose roles belong to that department. By taking this approach, you can help to ensure that the selection process is fair and impartial.
Another important factor to consider is how the skills of the employees in the pool compare to the skills required for the remaining jobs. For instance, if you are making staff redundant from your marketing team but you still need someone with experience in social media, then it would not be reasonable to include employees from other departments who do not have that skill.
Ultimately, the goal is to identify a pool of employees who are suitable for redundancy in terms of both their skills and the nature of their work. By taking a thoughtful and considered approach, you can help to minimise the risk of an appeal.
Decide on the redundancy selection criteria
Once you’ve established your redundancy pool, it’s time to create the criteria you’ll use to decide who is made redundant. It’s important to make sure that the criteria you choose are as objective as possible, so that personal opinions and prejudice don’t play a role in your decisions.
The criteria should also be measurable, so that every employee can be compared against the same standards. This will make it easier to account for your decisions. When you’re deciding on the criteria, it’s helpful to look at feedback you received from employees during discussions. This will give you a better sense of what standards are important to them. Ultimately, you want to choose criteria that will help you make the best decisions for your business.
Making staff redundant: what does my selection criteria need to factor?
Your selection criteria might include the following factors:
Consult with staff as a group
Consulting with staff is good practice regardless of how many redundancies you have planned. If you have more than 20, then you’re legally obligated to participate in collective consultations.
When you provide employees with advance notice of the need for redundancies, you should also inform representatives such as trade unions. This is an opportunity to receive feedback regarding the plan you have proposed. Employees may challenge your decisions or offer alternative solutions.
Because employees have the right to respond to your plan, you have to provide sufficient time before dismissals are due to take effect. Depending on the number of redundancies in your plan, the minimum advance warning you must provide is between 30-45 days. Consulting with staff and giving them adequate notice is important to ensure a smooth process and to avoid any legal challenges.
Making an employee redundant
Even if you’re only making one employee redundant, you should still consult with them. Before proceeding with redundancy, you should explore potential alternatives together. They should understand exactly why redundancies are necessary and why they have been selected for redundancy.
You’ll be expected to invite the employee to a formal meeting. A trade union representative or a colleague may also assist them. Their conditions of redundancy should be given in writing. You should also explain that they have a right to appeal their redundancy. By taking these steps, you can ensure that the process is as fair and transparent as possible.
What are the employee redundancy rules?
If you plan to make 20 or more employees redundant, then there are collective consultation laws that you are obliged to follow as an employer. These laws include informing appropriate representatives, such as trade unions, of your decision to enforce redundancies. At this stage, you should provide the number of redundancies required, the reasons behind this action, and how you plan to select employees.
You should also provide details regarding how you plan to carry out the redundancies. This includes timelines and payment amounts. Failure to adhere to these laws can result in hefty awards being paid out to all affected employees. As such, it is essential that employers take the time to familiarise themselves with the relevant legislation before taking any action.
As an employer, it is your responsibility to consult with employees and representatives before making any decisions about redundancies. The consultation period gives employees and their representatives time to express their opinions about the proposed plan.
The goal is to reach a consensus between employee and employer. With that in mind, it is your responsibility as an employer to respond to any requests for information that you receive during this process. If you’re planning 100 or more redundancies, you must begin consultations at least 45 days before the first dismissal.
For fewer than 100 but more than 20 redundancies, the minimum time period is 30 days. There aren’t any set rules for less than 20 redundancies, but to protect yourself from future appeals and to treat all employees fairly, it’s a good idea to consult with employees and representatives anyway.
By engaging in open communication and taking the time to listen to all voices involved, you can make the redundancy process as smooth as possible for everyone involved.
Notice can be given once any redundancy consultations has taken place and conducted and a final decision has been made, Your staff need to be given sufficient notice, this includes a leaving date.
Adhering to the minimum statutory notice period is paramount, the fair thing to do is obviously you can give staff more notice. You can also allow staff to leave sooner than the statutory period if you pay them in lieu of the notice period.
|Length of service
|Notice to be given
|1 month to 2 years
|1 week minimum
|2 years to 12 years
|A week for every year of employment
|12 years or more
What is the statutory redundancy pay?
- Employees who have worked for 2 years or more with your company are entitled to statutory redundancy pay.
- For every full year employees worked under the age of 22, they will receive half a week’s pay.
- For every full year worked between the ages of 22 and 41, they will receive one week’s pay.
- Every full year worked after the age of 41 entitles employees to one and a half week’s pay.
- The length of service is capped at 20 years, and the amount taken as “weekly pay” is the average earned per week for the 12 weeks prior to receiving a redundancy notice.
Making someone redundant and how you do it is a difficult decision that is often taken as a last resort by companies facing financial difficulties or restructuring their operations. It involves terminating the employment of an individual who is no longer needed due to changes in the organisation’s workforce, operations, or technology. This process can be challenging for both the employer and the employee, as it can result in a loss of income, stability, and security for the affected individual.
It is important for companies to approach the process in a fair and transparent manner, following relevant employment laws and providing appropriate support and assistance to those who are made redundant. Making someone redundant is never an easy choice, but it is important to handle it with empathy and professionalism to minimise the impact on all parties involved.
With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.