Managing Staff Redundancies – Introduction and Overview

Written by Andrew Johnson, Founder and CEO HRGuide - Thu 10th Oct 2024

Introduction & Overview

The first thing to ask yourself is if redundancies are necessary? Employees are a very valuable resource whom you invested in and developed so this decision should not be made lightly. Redundancy is usually a type of dismissal when a role is no longer needed. You should only consider making redundancies if part or all of the organisation is:

  • closing, or has already closed.
  • changing the types or number of roles needed to do certain work.
  • changing location

If you have concerns about an employee’s conduct or performance, you need to follow a disciplinary or capability procedure and not “dress it up” as a redundancy.

When considering making redundancies, your first step should be to check:

  • why you think redundancies are necessary.
  • what issues you’re trying to solve?
  • other options that might be available

Look at other options.

Before starting a redundancy process, you should consider all options to reduce or even avoid redundancies. For example, you could see if you can:

  1. Offer voluntary redundancy
  2. Change working hours
  3. Move employees into other roles
  4. Let go of temporary or contract workers
  5. Limit or stop overtime
  6. Not hire any new employees

1. Offer voluntary redundancy - You can give employees the option to put themselves forward for voluntary redundancy. It's your decision whether or not to accept the volunteers, taking into account the wider needs of the organisation. It’s a good idea to make this clear to employees early on.

Best Practice - Avoid Discrimination - If you do give the option of voluntary redundancy, you:

  • should offer it as widely as possible, not necessarily just to those at risk of redundancy
  • should not pressure or single anyone out
  • must select employees in a fair way

This can avoid the risk of indirect discrimination. For example, it could be age discrimination if you only select older employees.

2. Change working hours - There could be ways for you to save costs by having staff work more flexibly. You should always talk with employees and try to reach agreement first.

For example, you could offer employees:

  • homeworking
  • job shares
  • to work fewer hours

If it's written in their employment contracts, you can tell employees that they need to:

  • stop working for a while (known as a 'temporary lay-off')
  • work fewer hours (known as 'short time' working)

Lay-offs and short-time working are temporary solutions and must not be a permanent change to agreed working hours.

If you're changing what's written in employment contracts

You usually need to agree changes to employment contracts with employees. You can talk with them to try to agree. They do not have to accept. There are additional considerations when changing an employment contract after a TUPE transfer.

3. Move employees into other parts of the organisation

You should see if you can move employees into different areas of your organisation ('redeploy') to avoid redundancies. For example, by looking at what transferable skills staff have or if there other vacant or new roles in the organisation that require those skills. This should to “an equivalent role” 

4. Let go of temporary or contract workers

You should immediately review the terms of any temporary or agency workers you have employed to see if you can let them go first to reduce your labour costs and protect your permanent employees from redundancy.

5. Limit or stop overtime

Another option is to immediately stop or limit overtime, again, to reduce costs and retain your workforce.

 6. Not hire any new employees

Of course, you should also immediately freeze recruitment of new employees not only in those departments that are affected by potential redundancies but also in other functions where you may be able to redeploy existing employees and reduce the extent of redundancies.

Finally, if you have exhausted all the options above you can move to making the necessary steps to select employees for redundancy. 

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