HR Guide - Redundancy

Fewer than 20 redundancies

This document does not constitute a legal opinion or legal advice and is intended to be a guide only. To ensure you follow best practice (and, if applicable, do not compromise your insurance), you should contact the Alcumus HR Consultancy team before embarking on the process and then at each subsequent stage.

Redundancy: Fewer than 20 redundancies

Establish whether there is a genuine redundancy situation

• Is there a closure of the business for which the employee was employed?

• Is there a closure of the place of business where the employee was employed to work?

• Is there a reduced requirement for employees to carry out work of a particular kind?
 

Alternatives to redundancy

• You should consider whether you can avoid making compulsory redundancies or reduce the number of compulsory redundancies. Initial steps may include suspending or restricting recruitment, reduction or removal of overtime, not renewing contracts for contractors and ceasing or reducing the use of agency workers

• Consider temporarily laying off employees or reducing their hours of work if you have a contractual right to do so
 

Establish how many redundancies are being proposed

• If 20 or more redundancies are being proposed in a 90-day period then the collective consultation obligations will arise under TULRCA and it will be necessary to notify the Secretary of State of the proposed redundancies. Please contact Alcumus at the earliest opportunity if you are proposing to make 20 or more redundancies as you will need to comply with collective redundancy obligations which will impact on when the first dismissal can take effect

• If fewer than 20 redundancies are being proposed then it will be necessary to follow a fair procedure in relation to each employee at risk of redundancy as outlined in this guide. Unlike collective redundancies there is no legal obligation to consult for a minimum period
 

Consider the selection pool

• Consider the appropriate pool of employees if selection will be necessary. Is the affected job a unique/standalone position with just one incumbent? If so, there is no requirement to carry out a selection process and you are advised to contact your Alcumus HR Consultancy team so that you can follow the correct process. Where there is more than 1 employee affected the redundancy process outlined in this guide should be followed.

• A pool will normally consist of any employees who undertake similar work or have a similar skill set

• If you make redundancies without considering a selection pool correctly the dismissals are likely to be unfair

• Where there is more than one employee affected it will be necessary to follow a fair and structured selection process as outlined in this guide. You will need to create a proposed set of objective selection criteria

• You should speak to your Alcumus HR Consultancy team for further guidance when creating a suitable selection matrix
 

List of Vacancies

• Put together a list of alternative vacancies on a Company/Group basis

• You must consider offering suitable alternative work and are expected to look for alternatives throughout the business. The law removes the entitlement to a statutory redundancy payment if an employee unreasonably refuses a suitable alternative role. An employee is entitled to a 4-week trial period in any alternative role to determine whether or not it is deemed suitable
 

Potential redundancy announcement

• Meet with all the employees who may be at risk of redundancy. This can be done as a group briefing but do not forget about employees who might be absent due to illness, maternity leave etc.

• Explain the reasons for the potential redundancies

• Explain how many jobs are at risk of being made redundant (make sure it is clear that the redundancies are only a possibility at this stage)

• Explain that ways of avoiding redundancies are being explored

• Ask the employees for suggestions of ways to avoid redundancies

• Consider asking for volunteers for redundancy and provide a time frame for submitting applications in writing

• Explain the pool(s) and supply a copy of the proposed selection criteria

• Issue a copy of the potential redundancy announcement and keep a record of the discussions

Next steps

An invitation letter should be issued to all the affected employees for the first individual consultation meeting. A suitable letter is available from your Alcumus HR Consultancy team.
 

First individual consultation meeting

During the meeting you should explain the following to each affected employee:

• They can be accompanied at the consultation meeting by a Trade Union representative or work colleague

• The meeting is the continuation of the formal consultation process with them as an employee affected by the proposed redundancies

• The reason, in detail, for the redundancy situation (the business rationale, i.e. the need to restructure the department/business and proposed reduction in employee numbers)

• That their job is at risk of redundancy but this does not mean that, at present, they will be made redundant. They are now in a potential redundancy situation

• How many employees are in the pool

• How many positions will remain

• If you have not already done so, give a copy of the proposed selection criteria to be used and ask if there are any questions or feedback. You must consult on the proposed selection criteria and consider any representations about the selection process before carrying out the assessments

• How the selection process will be carried out and by whom (at least two managers should be involved in the assessment)

• As they are affected by the proposed redundancies they will be consulted and ways of avoiding redundancy or mitigating its consequences will be discussed and whether alternative employment within the Company/Group is possible will be considered

• Before any decision is made as to whether their position is redundant all reasonable alternatives will be considered

• This is an opportunity for the employee to raise any questions, issues or concerns

Keep a record of the discussions.
 

Next steps

• Explain that the employee should take some time to consider what has been discussed today

• Arrange a 2nd individual consultation meeting in a few days’ time to feedback the selection results

• The meeting will also give the employee the opportunity to put forward any suggestions they may have to avoid redundancy and to explore any alternative employment opportunities within the Company if they are provisionally selected for redundancy
 

Assessment process – scoring

• Tribunals look favourably on selection procedures based on a points system which scores the employee against the relevant criteria. However, care must be taken in the choice and application of the criteria to avoid factors which may be discriminatory on the grounds of someone having a protective characteristic (Equality Act 2010)

• Score each potentially redundant employee using the selection criteria and internal guidelines

• Ensure that at least two managers conduct the selection process to ensure the ratings are applied objectively and in a fair and consistent manner

• Ensure that you have the supporting evidence to justify all the ratings

• Rank the employees based on their overall score and check that you are comfortable with the outcome and that the scores awarded can be justified
 

Next steps

An invitation letter should be issued to all the affected employees for the second individual consultation meeting. A suitable letter is available from your Alcumus HR Consultancy team.
 

Second individual consultation – selection outcome meeting

For those who are successful - you should explain the following to each employee:

• They can be accompanied at the consultation meeting by a Trade Union representative or work colleague

• The meeting is the continuation of the formal consultation process with them as an employee affected by the proposed redundancies

• At the previous consultation meeting they were advised that their job is at risk of redundancy

• As they are affected by the proposed redundancies the assessment process has now been carried out for all those in the pool

• Feedback the employee’s score and explain that they will continue in the (specify role) subject to any appeal

• How their score was achieved. Show the employee a copy of their selection matrix (if requested)

• That the appointment will be confirmed subject to any appeal

• Answer any questions and note comments by the employee

• Keep a record of the discussions

For those who are unsuccessful - you should explain the following to each employee:

• They can be accompanied at the consultation meeting by a Trade Union representative or work colleague

• The meeting is the continuation of the formal consultation process with them as an employee affected by the proposed redundancies

• At the previous consultation meeting they were advised that their job is at risk of redundancy

• As they are affected by the proposed redundancies the assessment process has now been carried out for all those in the pool

• Feedback the employee’s score and explain that they have been unsuccessful and therefore provisionally selected for redundancy

• How their score was achieved. Show the employee a copy of their selection matrix and allow them to ask questions about the scoring/evidence gathered. Answer any questions or challenges from the employee

• Explore any other opportunities for alternative work to try and avoid redundancy. Discuss any vacancies or identify any alternative work for which they would be interested (subject to availability)

• That before any decision is made as to whether they will be served with notice of redundancy all reasonable alternatives will be considered and discussed with them

• The employee has the opportunity to raise any questions, issues or concerns

• The calculation of statutory redundancy pay (applicable if at least 2 years’ continuous service) in the event redundancy cannot be avoided. Explain this is only an estimate at this stage

• State their notice period and whether this period would be worked in full or part or paid in lieu if permitted

• That they can take some time to consider what has been discussed today. You will meet again in the next few days to review the situation with regard to any alternative employment opportunities to avoid redundancy

• That if it is not possible to identify any opportunities for alternative employment it may be necessary to serve notice of redundancy

Keep a record of the discussions.
 

Next steps

A further letter should be issued to those who have been provisionally selected for redundancy inviting them to attend a third and potentially final consultation meeting. A suitable letter is available from your Alcumus HR Consultancy team.
 

Third individual consultation meeting

Explain the following to each employee:

• They have the right to be accompanied at the consultation meeting by a Trade Union representative or work colleague

• The meeting is the continuation of the formal consultation process with them as an employee affected by the proposed redundancies

• As they are affected by the proposed redundancies they will continue to be consulted to discuss ways of avoiding redundancy or mitigating its consequences and to consider whether alternative employment within the Company/Group is possible

• That they can ask any questions relating to the selection outcome or the discussions from the last meeting

• If there are any alternative employment opportunities discuss and explore further – the consultation process may need to continue for a longer period

• If there is no interest in any of the current vacancies or no other job opportunities or ways to avoid redundancy explain that it is with regret that they have to be served with notice of redundancy

• When the redundancy will take effect. If not required to work their notice explain that a payment in lieu of (specify in weeks/months) notice will be made together with the statutory redundancy payment (if applicable) which is based on their age and length of service (quote the final figures). Explain that these calculations are based on the termination date and the amounts will be included in their final pay to be paid (state when or next available payroll)

• That their employment has been terminated on the grounds of redundancy and this will be confirmed in writing with a right of appeal

• Any Company property must be returned before leaving

• That this is an opportunity for the employee to ask any final questions

Keep a record of the discussions.
 

Next steps

Prepare and issue the confirmation of redundancy letter including a breakdown of the redundancy entitlements and relevant time frame for the appeal. A suitable letter is available from your Alcumus HR Consultancy team.
 

Appeal stage

• If the employee appeals, invite them to attend a further meeting to hear their appeal. The appeal should be held by a more senior person who has not been involved in the process to date

• Allow the employee to be accompanied by a Trade Union representative or work colleague

• Following the meeting, write to the employee advising the outcome of the appeal and stating that this decision is final

An invitation letter for the appeal hearing and a suitable outcome letter can be obtained from your Alcumus HR Consultancy team. You should take further advice at this stage of the process.