The redundancy process: how to let people go

Having to make someone redundant, particularly in the uncertain times of the COVID-19 pandemic, may be one of the most challenging things you will have to do in your professional life.

However, there are steps you can take to ensure you are acting with compassion and complying with the law.

Is there a genuine redundancy situation?

Is there:

• A business closure?
• A workplace closure?
• A reduced requirement to do work of a particular kind at a particular place?

If you can answer ‘yes’ to one of the above, then you are most likely in a redundancy situation.

Consultation

Having established a genuine redundancy situation, the next step is to consult with the employees affected. That may be the whole workforce at one particular location, in the event of a workplace closure, or employees undertaking a particular role or duties, where there is a reduced requirement to do work of a particular kind.

Consultation is vital to ensure that the redundancy process is fair. You should:

• Present the redundancy situation as a proposal and not as a foregone conclusion. It is vital that consultation is completed at the stage where the proposals are still proposals, and no firm decisions have been made.
• Provide employees with adequate information and time to enable them to respond to the proposals and put forward any suggestions.
• Carefully consider the responses given by employees during the consultation, including any ideas to avoid redundancy, such as reducing costs in other ways by limiting overtime, freezing recruitment and temporarily reducing working hours, for instance.
• Consider and consult with affected employees about any opportunities for redeployment or other suitable alternative roles within the business.
• Consult with relevant unions or employee representatives where necessary.
• Keep good contemporaneous notes about your discussions.

Selection

The key principles to bear in mind when selecting employees for redundancy are:

• Think carefully about any pool of employees that are going to be potentially redundant, from which individuals will be selected. A pool usually includes those doing the same or similar work.
• Employment tribunals like to see an employer score employees on a range of objective criteria such as performance, attendance, skills, length of service and disciplinary record.
• Collate objective input from managers on scoring to demonstrate that they have reflected on relevant information and documents, such as an employee’s appraisals and attendance records.
• When considering an employee’s attendance record, allowances should be made where there is any disability-related absence, as counting disability-related absences could amount to unlawful disability discrimination.

How to avoid a potential employment tribunal claim

Effective and compassionate communication with employees is key.

It is important to be open and transparent about the proposals and the reasons behind them, and that you show that you are open to listening to employees’ suggestions by offering sufficient time and open lines of communication.

This is helpful on two levels. Firstly, it assists when you need to show that you have carried out meaningful consultation. Secondly, and on a more personal level, whilst many employees will feel very disappointed and even angry to be part of a redundancy situation, the majority of employees will appreciate you being open and honest with them. This will lead to preserving at least some goodwill.

Practical tips

Finally, here are five practical tips if you find yourself in a position where you need to let people go because of redundancy:

1. Make a plan: Before you start the redundancy procedure, make sure you understand the business reasons behind the proposals and have a plan in terms of proposed timescales. Share this with affected employees so that they know what is going to happen at each stage. This should put you and the employees more at ease as you will be comfortable, and they will understand the process that you are following.
2. Communicate in person, or via video conferencing, where possible: In current times, meeting in person may be difficult. However, it is important to consider whether there are other ways to visibly see the employees when you are communicating with them. Often things can get lost in translation in emails, or letters, and these can often be very impersonal, leaving employees feeling isolated. Talking to your employees face-to-face is often the best way if possible.
3. Offer support where you can: Offer your employees a dedicated point of contact in the event that they have any questions. If you have a dedicated employee advice line that can offer advice on mental health and financial matters, ensure that you are reminding employees of this.
4. Voluntary redundancy and early retirement: In order to avoid compulsory redundancies, is it possible to look at voluntary redundancy and early retirement packages via a settlement agreement?
5. Seek advice if you’re unsure, or if anything unusual arises.

To decide to make redundancies is rarely a decision that any employer takes lightly and communicating this to employees is often very difficult. However, by following the steps set out above, and taking advice when you need to, you can be sure that you are delivering the message in the best possible way.

Please note, the information included in this update is correct at the date of publishing.