Advice on Redundancy Procedure & Consultation Process
Whilst the horrible year that was 2020 is behind us, for many companies 2021 will be just as tough and it is likely that redundancies will still be an unwelcome necessity for a lot of businesses. With this in mind, it is especially important that before a company enters into a redundancy process the following key advice on redundancy procedure is considered.
The Business case
It is imperative that an employer documents the reason why a redundancy process is required and what other alternatives to redundancy have been considered. The employer can then present the business case to the affected employees during the consultation, ensuring an open and honest process, but also have it as a foundation to defend any potential claims.
Many employers fail to put down in writing their rationale for any proposed redundancy and this can undermine the fairness of any consultation process and put the company at a serious disadvantage in front of a tribunal should any dismissal result in a claim.
The redundancy process should be a last resort for any company and an employment tribunal will want to see evidence that an employer has done all it can to avoid any dismissal.
Don’t put the horse before the cart
Whilst a company may already think that it knows which employee(s) should be made redundant, it is important to ensure that the selection of the employee(s) to be made redundant (if no alternatives are available) happens during the consultation stage of the process and not before. Such selection needs to be well thought out and will need to follow a fair and objective selection process.
Advice on Redundancy Procedures & Time Scales
- When looking at redundancies, a company needs to consider how much time the consultation process is likely to take as well as factoring in the maximum notice periods of the employees that are likely to be made redundant.
- Whilst not made explicit in law, as a rule, a reasonable consultation period for less than 20 employees with over 2 years’ service is around 2 weeks, anything less than this will need to be justified and evidence provided that is has been meaningful.
- By law, the consultation process will increase to a minimum of 30 days if consulting with 20-99 and 45 days for 99+ employees. Failing to follow these consultation periods (even if the company is closing) could result in an unfair dismissal claim as well as an additional claim for failure to collectively consult.
- On top of the consultation period a company needs to remember either statutory or contractual notice requirements. As a minimum this will be 1 week for every completed years’ service an employee has, up to a maximum of 12 weeks.
Wirehouse clients must consult with our HR Advice Team before embarking on any redundancy process. Let us guide you through any pitfalls you need to be mindful of and ensure you have a robust business case and fair process in place to support your proposed actions.
If you are not a Wirehouse client, get in touch with our Employment Law team today for advice on redundancy procedure or surrounding any HR issues you may have.