Managing Employee Redundancies – Introduction and Overview

Written by Andrew Johnson, Founder and CEO HRGuide - Wed 23rd Oct 2024

Introduction - Follow the right process.

If you do decide redundancies are necessary, you should check if you have:

  • a redundancy policy you must follow.
  • check if you have a collective agreement with a trade union with details of what you must do

You must follow a fair redundancy process and this must include:

  • consulting Employees
  • collectively consulting employees if more than 20 are at risk of redundancy

You might not always be able to avoid redundancies, but by working with employees you could find ways to save jobs and better understand how to plan for the future.

1. Make a redundancy plan

You should make a redundancy plan that you’ll share with all employees and put into action. It can help you follow a fair process and avoid the risk of legal claims. It’s a good idea to work with any trade union or employee representatives when making a plan if you have them.

The redundancy plan should include:

  • all the options you’ve considered before deciding on redundancies.
  • the number of redundancies you’re considering
  • keeping employees informed and supported throughout the process.
  • consulting all employees affected, including those off work, for example on maternity or sick leave
  • timeframes, for example to leave enough time for consultation.
  • agreeing on fair selection criteria
  • whether redundancy pay and notice periods are statutory or contractual
  • an appeals process for if an employee thinks the redundancy process or their selection was unfair.

2. Support and train managers

An organisation with managers will need them to help handle the redundancy situation and keep employees informed.

You should make sure your managers:

  • know why redundancies are being made (all management need to be consistent in their messages)
  • understand in detail the redundancy plan.
  • are comfortable and confident to talk and work together with employees about the redundancy process.
  • know how to raise issues or ideas with those leading the redundancy process.
  • have training to be confident in carrying out any duties.
  • know where to go for further support.

By involving managers from the start and keeping them informed and updated throughout, they’ll be able to:

  • come up with ideas that help ensure a smooth process and reduce or avoid redundancies.
  • effectively talk with employees about the redundancy process and plans
  • make redundancy dismissals and give notice of when employees selected for redundancy will leave.
  • help restructure in the best possible way.

3. Tell employees

As soon as possible, you should tell ('inform') your employees that you're considering making redundancies. You should hold a meeting with all employees affected, not just those at risk of redundancy, where you explain:

  • the risk of redundancy and the reason why it may be necessary.
  • how many redundancies you're considering.
  • what happens next, including how everyone will be consulted.

You should encourage employees to ask questions. The meeting can be held online if people are working remotely.

For employees who are at risk of redundancy, you should also confirm in writing:

  • that they're at risk of redundancy
  • whether they have other options, such as voluntary redundancy or redeployment.
  • the outline of your consultation plans
  • You should continue to keep employees informed throughout the redundancy process.

4. Hold redundancy consultations

You must consult with your employees before finalising any redundancies. If you do not hold genuine and meaningful consultation before making redundancies, employees could claim to an employment tribunal for unfair dismissal.

Consultation is when you talk and listen to affected employees. In collective consultation you also consult with their representatives. You should use consultation to try and agree actions wherever possible, for example the selection criteria.

During consultation, you should discuss:

  • the changes that are needed, what you plan to do, and why.
  • ways to avoid or make fewer redundancies.
  • the skills and experience needed for the future.
  • the criteria for selecting employees for redundancy.
  • any concerns employees may have.
  • how you can support and arrange time off for affected employees, for example to update their CVs and get training

Employees will often have good ideas that may help to avoid redundancies. You do not have to agree to their suggestions, but it's important to seriously consider any ideas that could reduce redundancies, otherwise employees could claim the redundancy process has been unfair.

5. Check if you need to hold collective consultation

If you're planning to make 20 or more redundancies, you should check if you need to hold 'collective consultation'. You might have a workplace policy or agreement that says you must collectively consult a trade union or employee representatives, no matter how many redundancies you're planning.

It can still be good practice to collectively consult even if you do not have to. It can help:

  • you to fully be involved with employees about ways to achieve the change that's needed.
  • reduce negative effects on employees.
  • the process be fairer and quicker.
  • employees feel that any decisions are fair, and so reduce risks of legal claims.

6. How to hold individual consultation meetings

Some parts of consultation could be in small groups or team meetings. You should meet each affected employee in private, at least once. Meetings can be on the phone if you both agree to it and there is a clear need, for example if someone works remotely.

You should consider allowing employees to be accompanied at any one-to-one meeting. A companion can be helpful as they can:

  • give the employee support.
  • be a neutral person to observe.
  • speak for the employee if needed.

You should make sure any managers who lead consultation meetings:

  • have had training in managing the meeting appropriately.
  • are fully informed about the redundancy plans and process.
  • can present the plan for the redundancy process clearly.
  • can provide everyone with a questions and answers document.

7. How long consultation lasts

There are no rules for how long individual consultation should last. But you should check if you have a policy or agreement in place that does have rules. You do not need to reach an agreement for consultation to end. Consultation should be meaningful and you should be able to show you have genuinely considered any suggestions or points made by each employee, even if you do not accept them.

N.B. If there has been a TUPE transfer - If there are redundancies after a TUPE transfer, consultation can start before the transfer and continue after. But you should not select employees for redundancy before the transfer takes place.

All of these consultation meetings should be followed up with a letter outlining the points from the consultation meeting and set out the next steps.

 

 

It's important to have a reliable redundancy policy and procedure outlined in your employment handbook. This ensures everyone is aware of how redundancy is dealt with. If you don't follow a fair procedure and take inappropriate redundancy action, you may be taken to an employment tribunal.

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