Redundancy - Getting it Right

by Kate Russell

Redundancy notification procedure

Redundancy is a dismissal and the process followed must be fair and applied fairly.

The courts make it very clear that employers are under a duty to consult, so unless there are volunteers, you will have a number of meetings with individual employees to advise them of the risk of redundancy. During this process you should discuss what can be done to reduce or remove that risk before any final decision is taken or notice served on the employee.

You must allow reasonable time for the consultation process to take place. If there are fewer than 20 employees affected, there is no time laid down by the law for the consultation process, but it must be reasonable. You would usually allow about three or four weeks, but it does depend on circumstances. It is important to demonstrate fairness, transparency and clarity and not to act with what the courts might consider to be improper haste. In management terms, this can be very challenging, especially when you know that there’s no real prospect of avoiding redundancies. To avoid complaints of unfair dismissal you have to demonstrate absolute compliance.

Normally, you will start the process by having an informal face-to-face meeting with the employee(s) whose job is at risk of redundancy, after which you will have individual meetings.

The meetings should be spread over several weeks to enable proper consultation to take place.

Step one – the proposed business plan

Meet with the employees who are likely to be affected by your proposals. Set out the proposals, give the reason for them and evidence your reasoning. Say that before making any final decision you are consulting with those affected by the proposals (if they go ahead) and want to take their feedback into account before finalising your plans. Write to confirm the discussion and next steps. See example letter 1.

Give those affected a few days and take their views into account. Once you have done this you can make a decision. Inform the employees. If employees are still at risk of redundancy as a result of the decision, start the next stage of the consultation process.

Checklist 1

Fair selection process

Pool of one/ no selection pool

If you are closing an entire department or the employee at risk is genuinely in a pool of one you can start the individual consultation without having to use a selection matrix.

Meet the employee to start individual consultation. There is no right to be accompanied at this stage, but many employers will permit a workplace companion to attend.

If bumping applies, explore it here.

If the employee is a suitable candidate and there are no others at risk who might be interested, you can redeploy the employee into a new role if you wish.

If there are any suitable vacancies but you do not wish to redeploy the employee without further assessment or if there are several potential candidates who are at risk of redundancy, provide details to the employee to enable him to decide if he wishes to be considered for the role. If he does, provide details of the selection process and pause the redundancy consultation process to enable him to apply.

If he applies and is successful, write to confirm the outcome and the terms on which the employee is employed. In this case there is no redundancy.

If the employee is unsuccessful, does not wish to be considered for the role, or there are no suitable alternatives continue with the redundancy consultation. Once this stage has been completed write to arrange a formal meeting. See example letter 2.

Once other avenues have been exhausted you will conclude the consultation process. See conclusion of the consultation process below.

Checklist 2

Where there is a selection pool

Where you have to select one or more employees from a bigger group, you will identify those who are at risk of redundancy by using a matrix. This will show a range of objective criteria to enable you to make the selection.

Meet with the employees individually. Explain that because there are a number of people in the pool you have to look at a range of criteria in order to be as fair as possible in the selection. Show the employee the unscored matrix and explain it. Give the employee a copy so he can go away and consider the criteria and weightings. Arrange for a further meeting (or method by which he can provide feedback) so you can make any adjustments before any scoring takes place. Write to confirm the process. See example letter 3.

Click here for an example of a matrix.

Take feedback upon the criteria and the weighting attached to each criterion. Any comments are considered, and adjustments may be made to the matrix. Agree the next meeting date at which the scored matrices will be fed back.

Checklist 3

Making a selection

At the next meeting, present the scored criteria for each of those employees in the ‘at risk’ group. Again, you will be meeting on a one-to-one basis. You need to be able to provide evidence as to why you have awarded the scores you have. This proves that you have been fair and objective in your scoring. At this meeting, you can advise individuals who is and who is not at risk.

For those who are not at risk, explain that they need to exercise discretion and take an empathetic approach with regard to their colleagues who are at risk.

Advise the employees who are at risk that you are now consulting with them about how to reduce or remove the risk of redundancy.

This is the start individual consultation. There is no right to be accompanied at this stage, but many employers will permit a workplace companion to attend.

If bumping applies, explore it here.

If the employee is a suitable candidate and there are no others at risk who might be interested, you can redeploy the employee into a new role if you wish.

If there are any suitable vacancies but you do not wish to redeploy the employee without further assessment or if there are several potential candidates who are at risk of redundancy, provide details to the employee to enable him to decide if he wishes to be considered for the role. If he does, provide details of the selection process and pause the redundancy consultation process to enable him to apply.

If he applies and is successful, write to confirm the outcome and the terms on which the employee is employed. In this case there is no redundancy.

If the employee is unsuccessful, does not wish to be considered for the role, or there are no suitable alternatives continue with the redundancy consultation. Once this stage has been competed write to arrange a formal meeting. See example letter 2

Once other avenues have been exhausted you will conclude the consultation process. See conclusion of the consultation process below.

Checklist 2

Conclusion of the consultation process

As this is a formal meeting, the employees who are at risk are entitled to be accompanied by a work colleague or trade union representative. Meet with each employee in turn, with his companion if he wishes. Review the options. If no suitable alternatives to redundancy have been found, confirm this and advise that the employee is redundant.

The employee will either work his notice, be placed on garden leave or more usually dismissed with immediate effect and paid notice in lieu.

As redundancy is a dismissal the employee should be offered the right of appeal.

All of this is confirmed in writing. See example letter 4

Checklist 4