This can often occur when there is a downturn in sales, new systems replace manual workers, or the company is closing, being restructured or moving elsewhere.
With over 400,000 workers being made redundant in 2020, redundancy has been thrown into the spotlight in workplaces around the country as COVID-19 changed the shape of the workforce for many organisations.
If you’re faced with the difficult decision of whether to make redundancies or not, Neathouse Partners can help.
The emotional toll of redundancy for employees that are being made redundant cannot be underestimated.
The process can have a real impact on morale, productivity and motivation across the company, whether directly impacted or not.
To minimise the impact on affected employees and the wider workforce, it’s imperative to take professional HR advice so that you can be confident that you are handling the situation correctly to help the restructuring of your business go as smoothly as possible.
Redundancies and restructuring your business can be challenging and stressful situations to be in.
This is a complex area of HR that needs to be dealt with in a sensitive manner adhering to fair redundancy processes to ensure that all employees are treated fairly, whilst maintaining the morale of the rest of the workforce.
The correct handling of redundancy is also important to ensure that you don’t leave yourself open to employment tribunals, unfair dismissal claims and discrimination claims from disgruntled employees.
Neathouse Partners can offer you professional guidance and redundancy advice on both an ad hoc basis and as part of one of our fixed-fee packages.
Read on for a brief overview of fair redundancy processes to follow and how you can get help managing these difficult restructuring conversations in your business.
Whilst not an easy process to go through, redundancy is a potentially fair reason for dismissal where the dismissal is attributable to business closure, a workplace closure or a reduced requirement for a particular type of work or skill set.
To ensure that a fair redundancy process is followed, you should note the following key points in your management of redundancy:
As well as being entitled to the fair redundancy steps outlined above, employees that have been with the company for two years or more at the end of their redundancy notice period should also be given:
When deciding if you need to make redundancies, it’s important to consider the cost of doing so for your business.
On top of a drop in morale and changes to the workplace atmosphere, redundancy can be expensive for employers, so it’s important to consider this when working out if redundancy is the best way to proceed for the business objectives.
The level of redundancy pay that employees will be due will depend on; the amount of time that they have worked for the company, whether they have been offered alternative work and refused it, the type of role that they work in, and whether your firm has its own redundancy package over and above statutory redundancy payments set by the government.
Statutory redundancy pay is payable to any employee with two or more years of service and is capped at 20 years of service.
The calculation of weekly pay to use when working out redundancy payments is based on the average earnings made per week in the 12 weeks before sending the redundancy notice to staff.
Statutory redundancy pay for employees with over 2 years of service:
It’s natural for employees at risk of redundancy to have lots of questions and concerns.
As their employer, you will need to be able to answer these efficiently and effectively to make sure that the redundancy process runs as smoothly as possible and minimises the stress that employees will experience.
Consultation is key and during the consultation process, you should listen to any questions that are asked and ensure that they are responded to.
A common complaint from employees who are made redundant is that they felt that the process was merely a box-ticking exercise and it is vital to ensure that staff feel that you are genuinely engaging with them to try to find alternatives to redundancy.
Even where this is not possible, you should still try to be as considerate as possible as this is likely to be a time of great concern for those affected.
As you can see, there are plenty of steps that you as employers need to take to ensure a smooth and fair redundancy process when you need to make difficult decisions about the size of your workforce.
If you would like support with managing redundancy conversations or guidance on the procedures to follow to protect yourself from claims of unfair dismissal or employment tribunals whilst ensuring that employees are treated fairly, please contact us.