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Employment Law Solicitor
Jon Curtis, Partner 0114 272 1903 | email Jon View Jon's profile |
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Employers who are proposing to make redundancies will need to consider a number of issues prior to actually dismissing any employee as redundant. How they consult with those at risk of redundancy and how to fairly select those employees to be made redundant are key considerations. It is important to appreciate that redundancy procedures must be tailored to suit the particular circumstances - it is highly unlikely that any two redundancy situations will be identical. Employers must also follow a fair procedure and ensure compliance with the statutory disciplinary and dismissal procedures. Failure to do so will almost certainly give rise to claims for unfair dismissal and potentially other claims as well. |
Is there a genuine redundancy situation?
In order for a redundancy to be fair, there has to be a genuine redundancy situation. This occurs when there is a “reduction in the requirement for employees of a particular kind.”
For example, if you currently employ maintenance staff but have sold off the building they maintain, you have a “reduction in requirement” for maintenance employees, and there is a genuine redundancy situation. On the other hand, if you have a poorly performing salesperson, and want to dismiss this person (but intend to replace him / her with another employee) you do not have a genuine redundancy situation and the dismissal should be handled differently (i.e. a performance-related dismissal).
Collective consultation
If the employer is proposing to make 20 or more redundancies within a 90 day period, the obligation to collectively consult with their employees will kick in. They are obliged to consult with any recognised trade unions if applicable, or alternatively to invite employees to elect employee representatives for them to consult with.
The employer must provide the trade union/s or employee representative with details of the proposed redundancies. There are rules governing the content of information to be given, the way in which the information should be given and when the information should be given.
Consultation must be meaningful and the content of consultation must include ways of avoiding the redundancies, which includes discussion about the business reasons for the redundancies, reducing the number of employees to be dismissed and mitigating the consequences of the redundancies.
If you are proposing to make 20 to 99 redundancies, the consultation period must last at least 30 days before any employees are dismissed. If you are proposing to dismiss more than 100 employees, the consultation period must last at least 90 days.
The obligation to consult applies to all redundancy situations, not just where 20 or more redundancies are proposed. Although the law does not state a minimum period for consultation in these circumstances, the employer must be able to show that consultation was meaningful and that the employees were afforded the opportunity to comment on / challenge the fairness of certain aspects of the process. Normally an employer making less than 20 redundancies should consult for at least one month.
Selection pools
The employer must consider the relevant pools for selection. A “pool” is a group of employees who are at risk of redundancy.
As a very important general rule, pools should be drawn as widely as possible. If for instance you have sales administration staff who do basically the same job as the general administration staff (i.e. form filling, answering the phones, general admin work etc) you should form one administration pool rather than two. There will of course be certain circumstances where the redundancy of a ‘unique’ role is necessary. However, employers must be sure that the role is unique to avoid unfairly dismissing an employee. If you are unsure, it is worth taking advice on this before continuing with the process.
Selection criteria
Where selection is required, once the employer has identified the pools for selection, they will need to start thinking about the selection criteria as soon as possible. Ideally, you would want to inform employees’ of the criteria at the same time you inform them that they are at risk of redundancy. This allows them the chance to discuss the criteria with you during consultation but before you actually make the selection.
It is absolutely critical that the selection criteria are as fair and objective as possible so as to minimise the ability of a selected employee to challenge his / her selection and / or ultimately claim for unfair dismissal.
More consultation
Regardless of the number of redundancies proposed, the employer will need to hold meetings with and confirm certain information in writing to employees at various stages of the process to ensure that any subsequent redundancy is fair.
Employees who have more than two continuous years’ service who are dismissed by reason of redundancy are entitled to a statutory redundancy payment. This must be paid to the employee – along with any other contractual entitlements – upon termination of their employment.
If you are an employer and you are considering making redundancies, please contact Jon Curtis, Head of Employment on 0114 272 1903 or at jon.curtis@ironmongercurtis.com for advice and support. We are experienced in guiding businesses through the redundancy process to ensure that it is carried out as fairly as possible. Similarly, if an ex-employee has brought an unfair redundancy dismissal claim against you, we are well-equipped to help you resolve that claim in the best possible way for your business.
If you are an employee and would like advice on an ongoing redundancy process, or have recently been made redundant and believe that the redundancy was unfair for any reason, please contact us on 0114 253 6559 and our specialist employment law advisors will be happy to review your case for you. Alternatively, you if you have been dismissed and believe that the reason for your dismissal was redundancy, but have not received a redundancy payment, you may have a claim to recover that payment. We will be happy to represent you in any employment tribunal proceedings. Please note that any claim for unfair dismissal must be brought within three months of the date of your dismissal, and claims for a statutory redundancy payment must be brought within six months of the date of your dismissal, so please do not delay in seeking advice!What are the advantages?
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