Is redundancy your best and only option?


Is redundancy your best and only option?

In this article, Senior HR Consultant, Louise Angell discusses whether redundancy is the only option for a business and if it is, how to get it right.

Meta, P&O, Twitter and the Post Office are among the many companies making staff redundant. One huge contributing factor in the sudden surge of redundancies is linked to the current economic uncertainty and instability. As financial pressures continue to build, more businesses look at the tough decisions they may be required to make to navigate the uncertain economic climate.

Businesses are looking for ways to reduce their costs whilst still meeting demands and customer expectations and sadly SME businesses are finding themselves in the same boat.

Are there any other options instead of redundancy?

Employers should look at other potential options such as a temporary change in working hours, reduced hours, letting go of temporary or contract workers, limiting or stopping overtime, don’t hire any new employees and changes to terms and conditions before considering redundancy as the resort.

How to deal with redundancies if unavoidable

No one wants to see a repeat of the calamity P&O made when they told 800 staff via a prerecorded video message they were being terminated immediately in March 2022.

If you are put in the position, as an employer, where you have to let some of your workers go, there are measures that are legally required to take place to ensure the process is fair. This must happen no matter the reason, including financial difficulties or simply no longer requiring the role.

Getting it right

  • Select the positions that need to be reduced. You are required to inform those potentially affected.
  • Contact your employees’ union, if they have one.
  • You are required to consult with affected employees throughout the redundancy process and take on board any suggestions they may have for how to avoid their roles being made redundant.
  • Once all of the necessary parties have been informed, you will then be required to decide the criteria by which employees will be measured to see if they will be kept on or made redundant.
  • Once this has been set out and workers have been informed, you cannot deviate from it.
  • The criteria set out by employers has to be fair and avoid any potential discrimination towards people with the nine protected characteristics. 
    • Race
    • Sex
    • Disability
    • Pregnancy & Maternity
    • Age
    • Gender Reassignment
    • Marriage and Civil Partnership
    • Sexual Orientation
    • Religion or belief
  • If an employee has evidence that the criteria were biased against one of the nine characteristics, they can take their ex-employer to the tribunal.
  • Before you can make someone redundant, you are required to make reasonable efforts to obtain other employment within the business, which might include making them aware of other vacancies that they have the qualifications to fulfil.
  • Once you have completed all of these steps, you can safely proceed with making staff redundant.

Remember the finer details and avoid the risk of an Employment Tribunal

  • When letting a worker go, you are legally required to give them a redundancy payment in line with their salary and length of employment. 
  • The amount is set out in law and depends on the employee’s age and how long they’ve been in their job.
  • If a worker believes that they haven’t their full redundancy award, they can take their employer to the employment tribunal.
  • If you do not follow one of the required steps, you risk lengthy and expensive claims in which you may be ordered to pay a large sum of money or be forced to offer the claimant their job back.
  • If an ex-employee has evidence that their employer altered the redundancy selection criteria during the process, they can take them to the employment tribunal and claim unfair dismissal. This could result in the workplace being forced to offer the role back to the worker or having to pay a larger severance fee – Don’t change the criteria!

If you require support and guidance with managing the redundancy process or if you want to discuss alternate options, please contact the HPC team:

T: 0330 107 1037


Twitter: @HPC_HRServices


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