Redundancy is a complex topic. This blog explains the basic redundancy process and principles you are required to follow if you wish to make redundancies in your business.
The 5 step redundancy process…
1 – Establishing a business reason for redundancy.
Start by establishing why there is a potential need to make positions in your business redundant. These should be business reasons that explain why the role is no longer necessary and should always refer to the ‘role’ not the ‘person’. Put it in writing so that you remain consistent throughout the process, and ensure you provide this information to affected staff.
2 – Identifying the roles that are at ‘risk of redundancy’.
Next, identify the ‘pool’ of potential staff who you will need to be put at risk of redundancy. Where you have a group of employees that undertake a similar type of work within your business you must make them all ‘at risk’. It is from this group that individuals may be selected for redundancy. Where only one person is undertaking such work then you effectively have a ‘pool of one’.
3 – Notifying staff who are at ‘risk of redundancy’.
Write to staff to inform them that they are at risk of redundancy, and let them know that you are starting the formal consultation period. Now is also the time to seek volunteers for redundancy.
4 – Hold redundancy consultation meetings
Conduct the necessary redundancy consultation meetings; if there is more than one staff member in the ‘pool’ you will need to hold a minimum of three meetings and establish fair selection criteria to identify who should be made redundant, but for just one member of staff you may only need to conduct one or two meetings.
5 – Consider alternatives to redundancy
Ensure that you consider any and all alternatives to redundancy throughout the process, this includes looking at other vacancies you may have that could be suitable for staff ‘at risk’ and considering different ways of working. This is a legal requirement and demonstrates that you have done all you can to avoid making staff redundant.
Why follow redundancy procedure?
It’s a legal requirement for all businesses when considering making staff redundant.
Not only does it reassure staff that you are taking all the appropriate steps, and you are doing it for the right reasons, but it also mitigates the risk of a successful tribunal claim. Approaching it from the point of view that you are seeking the help of your employees in a difficult time for your business, through consultation, may mean your employees have a suggestion that means you can avoid making any redundancies at all.
How long does the redundancy process take?
If only one person is affected the redundancy process can take as little as 2 weeks. But when you have a more complicated case or multiple staff members who are at risk of redundancy, it is likely to take 3-4 weeks or longer.
It is worth noting that the duration of the consultation process, and the number of consultation meetings required, can vary on a case by case basis depending on a range of contributing factors and therefore we always recommend taking expert advice before commencing a redundancy procedure.
This is a basic overview of the redundancy process designed to give small business owners an overview. Always remember that no two businesses are the same, so the advice and process will vary. If you need more help with making a role redundant you can get in touch with us on 0333 444 0165, or via firstname.lastname@example.org.