Reports that recruitment levels are falling and more employers are considering redundancies are hopefully over-stating the case, but some organisations may need to review policies and procedures on redundancy to ensure compliance, writes Fergal Dowling, head of employment law at the Birmingham office of national law firm Irwin Mitchell.
Common factors behind redundancy include pressure to reduce overheads and relocation or business closure. Where possible, employers should consider other options, such as flexible working, restricting overtime or offering a different position.
Management, however, may have no choice but to initiate compulsory or non-compulsory redundancy; the latter calls for employees to accept voluntary redundancy or take early retirement.
Bosses may need to examine the profiles of volunteers to determine if the skills of those who remain will support business performance.
Employers must ensure they are fair in selecting those they intend to make redundant to avoid charges of unfair redundancy dismissal.
It is worth applying several factors to arrive at who may be made redundant, such as appraisal reports, attendance and expertise. Some means of selection however immediately renders any redundancy dismissal unfair, including:
· Being a member of a trade union
· Part-time worker status
Furthermore, if management does not hold consultations with employees and their representatives, this could well lead to a ruling the redundancy was unfair.
An organisation making from 20 to 29 workers at one location redundant within a period of 90 days must consult with employees and/or their representatives at least 30 days before the first redundancy is to take effect. This increases to 90 days before if the intention is to make 100 or more people redundant.
Irrespective of numbers, employers have a duty to consult with employees too or risk any redundancy being ruled to be unfair.
Information regarding proposed redundancies must be provided, in writing, at the start of consultation, including:
· Reasons behind the redundancies
· Numbers of employees to be made redundant
· Rationale behind selection
· Calculation of redundancy
Employees who have been with a business for at least two years are entitled to receive a statutory redundancy payment, worked out on the employee's age, weekly pay and length of continuous employment.
Bosses should also remember they have a duty to offer alternative employment if appropriate and the employee is entitled to a trial period in the new role without impacting upon their statutory redundancy pay. Workers are also allowed time to seek another employer.
The prospect of redundancies appeals to neither employer nor employee. Legislation is in place, however, to make the process as fair as possible and maintain good relations among bosses, those employees who may continue with the business and those who are made redundant, some of whom may be re-employed should trading conditions improve.