How can an HR consultant help?
Handling redundancies is not easy. It can be hugely difficult for employers and employees alike.
Those affected by redundancy are not limited to those at risk of losing their jobs, friends and colleagues can all feel disheartened and miserable because of redundancy. Likewise, those handling the redundancy consultations and meetings can feel immense stress too – deciding which member of a team should lose their job is not an enviable position to be in.
If you’re faced with handling redundancies and you’re not sure where to start or how to approach it, Lamont Jones can help.
With over 30 years’ experience, we understand the stresses and pressures associated with redundancies and will work with you to ensure the best possible outcome for all of those involved.
We have more information on the processes and procedures mentioned on this page in our free download, A Guide to Redundancies. Or, for additional, expert advice or guidance on how to manage redundancies in your small- or medium-sized business, Speak to our team.
Redundancy
What is redundancy?
Redundancy is a form of dismissal that occurs when a role is no longer needed. Redundancy could occur because a business is:
Closing or has already closed Changing the types or number of roles needed to do certain tasks Changing location
Redundancy can be devastating for employees, who may suddenly find themselves facing an uncertain future and struggling to support their families. The stress and pressure redundancy can place on employees makes it vital that companies have effective policies and procedures in place for handling redundancy and supporting employees.
Individual redundancies
All grievances and disciplinary action should be handled with the utmost sensitivity and seriousness. Although they are part and parcel of work, these situations will likely be distressful for most employees.
What is the process for making an individual redundant?
If an employee is at risk of redundancy, or will be affected by redundancies, they are entitled to a consultation with their employer. The consultation period may or may not result in redundancy, but must give the employee and employer a chance to ask questions and share information.
In this case, as only one person is being made redundant, there are no rules on how the consultation should be conducted, except that it should be ‘meaningful’.
When less than 20 employees are being made redundant, there is no set timeframe for the consultation period to start, but the statutory notice period must be taken into account.
- If someone has been employed for between one week and two years, the notice period is one week
- If someone has been employed between two and twelve years, the notice period is one week for each completed year of employment
- If someone has been employed for over twelve years, the notice period is capped at twelve weeks
- To ensure compliance with the terms and conditions of the individual’s employment, the employer should review their contract to see if there are any clauses relating to redundancy.
What should happen in the redundancy consultation period and meeting?
The redundancy consultation period does not have a set time, but should be long enough for the employee and employer to consider their positions. This could be a couple of meetings or more depending on the number of questions and information that need to be shared.
Before the consultation meeting, the employer needs to collate information to present to the person or people at risk of redundancy. Employers must not present a finalised redundancy plan as this will invalidate the process and may lead to an unfair dismissal claim.
The information presented should include:
- Why someone needs to be made redundant
- Which employees are at risk
- The process that will be followed
- Whether voluntary redundancy applications will be considered
- How the employee will be selected for redundancy
During the meeting, employers should provide greater detail regarding the information above, the expected timeframes and what the redundancy package will include, and give ample time for the employee to respond. The employee’s response will typically revolve around how redundancies could be avoided and their feedback on the selection criteria.
It is important that, in the consultation meetings, employers are receptive to new ideas, like employees reducing their hours, taking unpaid leave or being redeployed to another team.
The cost of redundancy and redundancy payments
Redundancy payments are intended to help employees who have lost their jobs due to no fault of their own. The payments can help with finding new employment, such as job search and interview costs. Redundancy payments are also intended to help cover the loss of income associated with being out of work.
The amount of redundancy pay will depend on the employee’s service length and weekly pay. For example, those with a shorter period of service are likely to be paid less than employees who have been with their employer for a long time or who have high weekly pay.
Redundancy payments are not intended to be a windfall for employees but rather to help them through a difficult time. It is important to note that redundancy payments are taxable, so employees should be aware of this when budgeting for the period they will spend out of work.
Protecting employee health and wellbeing
When making the tough decision to downsize or restructure a company, employers need to be aware of the impact this can have on employee health and well-being. Taking steps to protect employees during this time can go a long way in ensuring a smooth transition and avoiding any legal repercussions.
These are four things employers should keep in mind when preparing for redundancies:
- Communicating openly and honestly about the changes - This includes being clear about the reasons for the downsizing, how it will impact employees, and what kind of support will be available during the transition.
- Give employees plenty of notice before changes take effect - This will give them time to mentally and emotionally prepare for the change, as well as make any necessary arrangements in their personal lives.
- Offer support services to employees - This can include access to counselling, financial advice, or outplacement services.
- Ensure adherence to employment law and statutory guidance - This includes consulting with employee representatives, following proper selection criteria, and providing employees with the necessary notice periods.
- By taking these steps, employers can help to protect employee health and wellbeing during the redundancy process.
Employer’s duty to provide information
The employer's duty to provide information includes ensuring that employees know their rights and responsibilities under the employment agreement and providing information about the company's policies and procedures. This duty also extends to providing employees with any other information that may be relevant to their work, such as health and safety information.
FAQs
Who has redundancy rights?
In the United Kingdom, redundancy rights are governed by the Employment Rights Act 1996. Under this law, employees who are made redundant are entitled to certain protections, including a minimum notice period and a statutory redundancy payment.
Redundancy rights are designed to help employees who have lost their jobs due to no fault of their own. If an employee has been made redundant, they should receive a notice period of at least one week. If they have been employed for more than two years, they are also entitled to a statutory redundancy payment.
The amount of statutory redundancy pay an employee will receive depends on their age, length of service and weekly pay. The Government’s redundancy calculator estimates how much statutory redundancy pay an employee may be entitled to.
If an employee has been unfairly dismissed, may also be able to claim compensation. This can be a complex area of law, so legal advice should be sought if an employee feels they have been treated unfairly.
What is a redundancy consultation?
When an employer is considering making redundancies, they must first consult with employees who may be affected. This consultation must happen before any decisions are made about who will be made redundant.
The purpose of the consultation is to give employees a chance to have their say on the proposed redundancies and to suggest ways to avoid or limit the number of redundancies.
- The reasons for the proposed redundancies
- How many employees are affected
- How the selection process will work
- What options are available to avoid or limit the number of redundancies (e.g. voluntary redundancy, redeployment)
Do employers need to provide redundancy notice?
Under the Fair Work Act 2009, employers are required to provide redundancy notice to affected employees. The amount of notice required depends on the employee’s length of service with the company. The employer must provide one week’s notice for employees with more than three months but less than one year of service. It’s two weeks’ notice for employees with one year or more of service – and for those with five years of service, it’s four weeks’ notice. The redundancy notice must be in writing and should be given to the employee personally or sent to the employee’s last known address. If the employer fails to provide proper redundancy notice, the employee may be entitled to redundancy pay.
Can employees appeal against redundancy?
Employees who are facing redundancy may be able to appeal the decision. This is typically done through an internal appeals process within the company. The employee will need to present their case as to why they believe the redundancy decision is unfair or unjustified. If the appeal is successful, the employee may be able to keep their job. However, if the appeal is unsuccessful, the employee will likely be made redundant.
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