Managing Redundancies – Questions and Answers
In my experience clients who are facing the prospect of having to make redundancies are mainly concerned with the practical aspects; what can I do, what can’t I do, and how do I do it?
Whilst every redundancy situation is different there are questions that arise on a regular basis. I have highlighted some of these below, accompanied with indicative answers.
Q How do I decide if I have to make employees redundant?
A That is a decision you will make based on the current and anticipated future needs of your business. If you anticipate requiring less staff you should always consider options other than redundancy, for example a change of working hours or patterns of work or even short term salary sacrifice arrangements.
Q Is it the job or the person who is redundant?
A Most commonly a situation of redundancy arises where the need for an employee to undertake a particular job has ceased or diminished or is expected to cease or diminish. As the need for the role to be undertaken changes so does the requirement for employees to complete this task. So, it’s the job that the employee is undertaking that is redundant.
Q Do I have to notify any third parties about the redundancies?
A Where you are proposing to make more than 20 employees redundant within a 90 day period you have to notify the Redundancy Payments Office by way of completing and submitting form HR1. If the number of proposed redundancies is less than 20 then no official notification is required.
Q What is consultation, and do I have to do it?
A Where you are proposing that less than 20 employees will become redundant there is not a legal requirement to consult with employees. However, I would always advise employers to consult with employees about the proposal to declare redundancies it is recommended good practice and demonstrates that you are a reasonable employer who is adopting a fair procedure in managing this situation.
Items to consult on would include the need to declare redundancies, timescale, the proposed selection procedure, and steps that can be taken to mitigate the need for redundancies.
Q Do I consult with all employees or just those who are at risk of redundancy?
A It would advise consulting with all employees who may be at risk of redundancy. I would also advise briefing those employees who work in departments that are not effected. Communication is key to successfully managing a redundancy programme and in my experience you can never over communicate.
Q How long should consultation last?
A Where there is not a statutory requirement to consult, it depends on how much there is to discuss. The consultation period can therefore be anything from a couple of days to a couple of weeks.
Q What should be included in a selection criteria?
A That depends on your business, however the criteria you use must always be objective, measurable and stand up to being scrutinised. Examples of reasonable criteria that could be included are job skills, disciplinary record, and occasional absenteeism, although here you will need to be careful that you are not discriminating against an employee if they have a disability.
I would advise against using subjective criteria such as attitude as it can neither be measured or readily defined.
Q Can’t I just tell somebody that they are redundant?
A No. Even where the selection is self evident it is important to follow a fair process that includes consultation. If you don’t consider alternatives how do you know if there are any?
Q How and when should I communicate with employees in writing?
A I would suggest at least twice. Firstly, at an appropriate time during the period of consultation to advise the employee that they are at risk of redundancy. The second letter would be sent after the consultation process has been concluded. This may be the time to give notice of termination of employment in writing.
Other letters may be required depending on how the consultation process is progressing.
Q Is there a good day or a bad day to make the initial announcement about redundancy?
A There is certainly a good day not to start the process and that is on a Friday.
As soon as you have made the announcement it is important to start the process of consultation immediately. Ideally this should continue the following day with employees being given the opportunity to ask questions and seek clarification on what you have announced. The break of a weekend prevents this happening and in my experience breaks the momentum of discussion that is so important to successfully concluding consultation.