Dos and Don’ts for UK Employers When Faced With Potential Redundancies

Redundancy is where you no longer need a staff member to carry out a job role. For example, if your business undergoes restructuring or changes its service output, you may need to dismiss some employees. If you need to make affected employees redundant, you must conduct a fair procedure and a lawful redundancy process. Otherwise, you may face a tribunal claim for unfair dismissal. This article will explain what you should and should not do as an employer when faced with potential redundancies in England.

Exhaust All Alternatives to Redundancy

Before going ahead and making employees redundant, you should exhaust all alternatives. Alternative options for making staff redundant include:

• offering part-time roles;
• cutting back on staff overtime;
• offering staff another position in your business; and
• training employees in new skills.

Be Open, Genuine and Fair

If you have to start potentially making redundancies, ensure that you are open, genuine and fair throughout the process. This means that you should keep your employees aware of what is happening, even if you are not legally required to consult your employees collectively. 

In addition, you should show that you are genuine when considering potential redundancies. You can do so by referring to the potential redundancy as a ‘proposal’ and listening to your employees’ views. If you act openly, genuinely and reasonably, your staff are more likely to understand your position and accept that redundancies may be necessary.

Ensure You Grant Your Employees Their Rights

As an employer potentially making redundancies, you must grant your employees their legal rights. For example, all your staff will be entitled to:

• reasonable time away from work to look for new employment or training; and
• not be selected for redundancy, where this is unfair.

Additionally, some of your staff may be entitled to redundancy pay. 

Do Not Make Redundancies Without a Genuine Reason  

If you face potential redundancies in your workforce, you should know that you can only do so if you have a genuine reason. Otherwise, a redundancy based on an unlawful reason can give rise to a claim in an employment tribunal.

Genuine reasons for redundancy include:

• the work your employee does is no longer required in your business;
• other employees are carrying out your employees’ job;
• your business is moving to a new location;
• your business is closing down, possibly due to insolvency; or 
• your business is changing how it does things.

Do Not Forget To Make Redundancy Payments

If you make staff redundant, you must ensure that you pay them their entitlement to a contractual or statutory redundancy payment. A contractual redundancy payment is where you state in your employees’ employment contracts an amount they will receive if you make them redundant. 

Where you have employees who have been with you for at least two years, they are legally entitled to a minimum statutory redundancy payment. The amount due is calculated using a formula so that it may vary for different employees. However, you can pay your employees more than this amount. 

Key Takeaways

There are many things you should and should not do if you face a situation where you may have to make redundancies. First, you should ensure that you exhaust all alternatives before making your staff redundant, such as offering your staff a part-time role in your business. You should also give your employees ample time to look for a new job. Finally, ensure you do not make a staff member redundant without a good reason. 

If you have questions about redundancy, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. So call us today on 0808 196 8584 or visit our membership page.

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