Making one or more staff redundant is never something that’s easy to consider, especially for a small business or charity, however sometimes it might be necessary.
Going through a potential redundancy process can be very stressful for any small organisation—and doing it without following the law could lead to expensive penalties. So if you’re looking to initiate a redundancy process, here are some basic steps to follow, helping you to make the process as simple as possible – as well as ensuring you stay within the law:
Make sure there are no alternatives
It is important to make sure that there aren’t other ways to solve the issue giving rise to the potential redundancy. After all, no one really wants to go through a redundancy process unless it is absolutely necessary. You can check that there are no viable alternatives by:
- Carrying out a cost review
- Looking at benefits or bonuses etc. that could be cut
- Considering reduced working hours or pay
The redundancy process
If you decide that you have no alternative but to make staff redundant, you’ll need to follow the following steps:
- Be clear on your reasons – try to do so in writing, so you can be consistent throughout
- Choose a ‘pool’ of potential staff who you will place ‘at risk’ of redundancy – please note that you don’t make a person redundant, but a role
- Let people know they are at risk and are now starting a formal consultation period
- Conduct individual meetings with at risk staff
- Compile a list of selection criteria and “score” everyone in the pool
- Discuss these scores during second individual meetings
- Continue to consider alternatives
- Make a final consultation with staff
- Tell everyone in the pool in writing your conclusions, and terminate the contracts of any staff whose roles are being made redundant
We would advise that in straightforward cases at small businesses or charities where it is a standalone post, you can go through this process usually in around 2 weeks. However, with more complex cases where you have a pool of staff it can take 3-4 weeks or potentially longer.
The key thing during the redundancy process is to always keep the employee involved. And remember, even after you have issued a dismissal and they’re serving their notice, you’re obliged to continue looking for alternatives.
There are varying levels of redundancy pay, based on age and length of service, capped at £479 per week (as of April 2016).
- 0.5 week’s pay for each full year worked under 22
- 1 week’s pay for each year worked between 22 and 41
- 1.5 week’s pay for each full year worked aged 41 and up
How we can help
Our HR support service for small business can help you through a redundancy process in a number of ways:
- When you need advice or just someone to talk to, our HR consultants are available over the phone to give you the HR support you need and answer all your questions
- We have produced a Management Guide and flowchart to help guide you through each step of the process in detail, to help you stay legally compliant
- Our easy-to-use HR software can steer you through specific portions of the process, inviting affected staff to meetings, communicating with everyone through the process, sending reminders to you for each stage, and keeping good records of every step
- Some customers find it helpful to have one of our consultants attend potential redundancy meetings with them.[item]We are happy to do this, but do charge extra for this at our standard hourly rate
If you want to find out more about how we can help, get in touch today on 0333 444 0165 or request a call back from one of our team.
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