Redundancy

If you are considering making changes to your business, including re-organising your workforce, restructuring, relocating or closing a site, we are here to help you minimise the risk of disputes and claims.

Redundancy is a label often used by employers as a reason to dismiss poorly performing employees. However, the legal definition of redundancy is quite narrow and covers the following situations:

• Closure of the business or the employee’s place of work
• Reduced need for employees to carry out ‘work of a particular kind’

All employees who have accrued more than two years of continuous service and who are dismissed by reason of redundancy are entitled to statutory redundancy pay, calculated in accordance with a set formula. In practice, most employers meet redundancy payments (except when insolvent, in which case, the payment can be claimed from the state). Most claims arise from redundant employees who feel that they have been unfairly dismissed or discriminated against in some way i.e. that they have been unfairly selected for redundancy or that redundancy was not the real reason for dismissal

To reduce the risk of claims, before announcing any redundancies, you should first make sure that the proposed redundancies fit one of the criteria mentioned above. Unless all employees are being made redundant, a selection has to be made as to whose employment is saved and who has to leave. It is how you approach selection which is the difference between a smoothly executed process and one fraught with employee unrest. Keep in mind too that this unrest may be felt by employees retained in the business, not just those who are selected for redundancy.

There is no perfect redundancy template to fit all situations. This is because each redundancy exercise is unique in terms of the underlying reason for it, the mix of staff and skillsets, individual performance levels and the availability of alternative roles. Call us for an initial discussion to help you get off on the right footing.

Contact our team on 0161 832 6131.