Following the results of a recent ACAS survey it is increasing likely that job losses are on the horizon
No employer wants to make redundancies, however, sometimes they find there is no other option.
ACAS has undertaken a survey on redundancies, the results of which were published on 11th May 2023.
If you are considering, or think you may need to consider, making redundancies then it is important to seek advice at the outset. There may be alternatives, which had not been considered, which mean the redundancies or fewer redundancies are necessary. In addition, there may be risks which you had not considered.
The effect of getting the process wrong could result in one or more employment tribunal claims. The financial impact on this could be detrimental both from a costs and time perspective of defending the claims and also if the claims are successful.
The process is different depending on the number of employees to be made redundant. The guidance set out below is on the basis that you are making less than 20 redundancies over a 90-day period, if this is not the case then I would recommend you obtain specific legal advice and guidance on the process.
Overview of Redundancy Process
1. Put together a business case.
This is important as staff will inevitably ask for the reasons the redundancies are required, and it would be good to share from the outset.
2. Decide which employees will be affected and what selection criteria will be used.
You will need to determine what roles will be placed at risk and what selection criteria will be used. It is really important that you get this process right and avoid any criteria which may be directly or indirectly discriminatory. In my experience it is usually the selection process that employees complain most about, as they can feel they have been unfairly selected.
3. Consult with affected employees.
You will need to have at least two meetings with your employees to discuss the reason for redundancy, the selection criteria used, any alternatives or other roles and any suggestions or concerns raised.
Any concerns or questions that are raised should be responded to prior to the next meeting, where possible.
In addition, you will also need to set out what redundancy payments will be made.
Where an employee has 2 years’ service or more, they will be entitled to a statutory redundancy payment as well as:
- Holiday pay for any accrued untaken holiday (if applicable); and
- Notice pay (this can be worked if required or paid in lieu)
4. Look at alternatives
You need to consider alternatives to redundancy and be able to demonstrate this. Redundancy has to be the last option.
Alternatives could include:
- Requesting employees reduce their hours;
- Increasing the availability of flexible working;
- Reducing overtime (if applicable) and
- Offering them alternative roles (even where training may be required);
Of course, sometimes there are no alternatives, but you must demonstrate you have considered them.
If you find yourself at risk of redundancy and would like to talk it through then we offer a no obligation free telephone call.