How to Get Redundancy Right?
Many businesses including my clients are facing redundancies some are large scale and others a handful.
Making someone redundant is a fair reason for dismissal. Or at least, it is a potentially fair reason and it is much more likely to be if you follow a fair redundancy process.
This involves four things, which can be summarised as…
- Reasonable selection pools
- Reasonable selection criteria and scoring
- Consideration of alternative employment.
Let’s have a look at each of them…
You have a legal obligation to warn your team that you’re considering making redundancies and consult meaningfully and individually with everyone who is affected. It’s important to keep an open mind during these consultations and genuinely listen to your employees: they may come up with alternatives to redundancy you hadn’t even thought of and I can’t emphasise strongly enough how important this stage is.
Unless you’re planning on making more than 20 people redundant, there’s no statutory timetable for consultation but it should take place when the proposals are still at an early stage. You’ve got to give employees enough information to allow them to make representations on why they should not be dismissed, and they should be given adequate time to do so.
And don’t forget to consult with all affected employees, even if they are on maternity, shared parental, or long-term sick leave.
As consultation can often be unexpectedly challenging, please feel free to reach out for guidance on making redundancies fairly and lawfully.
Reasonable selection pools
If you are removing a particular role and making everyone who carries out that role redundant, you’ll have already identified clear criteria and a ‘pool’ of people selected for redundancy.
But if you want to reduce numbers rather than remove a role completely, you will need to select the pool of employees to be considered. Whether this pool is created narrowly or more widely is up to you as tribunals rarely interfere with an employer’s choice — provided you can show you’re not motivated by trying to achieve a predetermined outcome.
Reasonable selection criteria and scoring
This is the third aspect of a fair procedure. You’ll need to draw up fair and objective criteria to apply to those in the pool and then select who will be made redundant.
Selection criteria can include attendance, disciplinary record, performance, skills, qualifications, and length of service. You can decide how you want to weight each category, although the more complex the weighting system, the more you may find yourself having to show you did not design it to target particular employees.
Be very careful not to use criteria which discriminate on the grounds of disability, age, or pregnancy. For example, don’t include absences you have authorised in relation to family leave.
Once you’ve chosen your criteria, score the employees in the pool. It is best for your line managers to assess their employees, but if multiple teams are involved there should also be some moderation of different managers’ scores.
Remember, you should not breach data protection by showing employees other people’s scores. You can give an average score, and sometimes you can show the scoring matrix, but anonymise the individuals.
Considering alternative employment
Finally, you must take reasonable steps to find alternative employment for everyone you’ve selected, either within your business or elsewhere in your group — and you should consult with them about this. If any affected employees are on maternity leave, they have special protection and the automatic right to be offered any suitable vacancies.
This was a timely reminder from Mr Daniel Barnett, barrister.