The furlough scheme comes to an end on the 31st October 2020, leaving many struggling businesses with difficult decisions to make around redundancy. It’s vital employers make the redundancy process fair for those individuals involved.
In this article, our Employment Law Solicitor, Amy Sadler explains how a solicitor can help a business facing the prospect of making employees redundant.
Making the Redundancy Process Fair
What are the steps employers must take during the redundancy process?
An employer MUST warn and consult employees. It has been established that informing and consulting employees is fundamental to the fairness of the redundancy process.
A suggested redundancy process would be as follows:
- Inform the employees – We suggest that the employer has an initial conversation with those at risk of redundancy. In this meeting the employer should address why they are considering making redundancies and warn the employees that they may be affected by the redundancy process.
- Confirm the warning in writing – Send a letter to the employees affected setting out what was discussed above and confirming the employee has been placed at risk of redundancy. The employer should have considered at this stage which roles may be at risk and how many employees they will be considering making redundant and they should confirm this also.
- Arrange individual consultations with the employees at risk – We suggest a minimum of 2 meetings. The first to discuss the selection pool and any selection criteria (sometimes employers do not use criteria but can use an interview-style process) and why the employee has provisionally been selected for redundancy. The employer should invite the employee to make suggestions to avoid the redundancy or why the employee should not be selected and discuss any suitable alternative roles.
- Arrange a second individual consultation – In the invitation letter the previous consultation should be referenced and provide a response to each employee’s suggestions. These points should then be addressed in full at the meeting.
- Following the second consultation a further meeting should be held confirming whether the employee has been selected for redundancy and the outcome should be confirmed in writing to the employee.
How can employers ensure the redundancy selection process is fair and doesn’t discriminate?
In assessing the fairness of the redundancy process a Tribunal will look at the reasonableness of the process followed, such as any selection criteria. As far as possible the selection criteria should be objective, able to be evidenced and not based on personal opinion.
Examples of objective criteria are:
- Performance and ability
- Length of service
- Attendance records
- Disciplinary records
Even these commonly used objective criteria are at risk of being discriminatory if not applied correctly. For example when considering an employee’s absence record the employer should be mindful of the reasons behind the absence. Absences for pregnancy-related illnesses, maternity or family-friendly leave should be discounted. Also consideration should be had where absences are linked to an employee’s disability. Selection based on this criteria may amount to disability discrimination and the employer should make reasonable adjustments in relation to the absences within the redundancy process.
What would be considered a ‘collective redundancy’? How does this process differ from the standard redundancy process?
If the redundancy process involves proposing to dismiss 20 or more employees then the employer will need to carry out a collective consultation within a 90 day time frame. Within this process the employer must not only conduct individual consultation with the employees but should also inform and consult representatives from a recognised trade union or where employees do not fall under union recognition, employee representatives, appointed or elected or.
Consultation should be held at the early stages of the redundancy process and the employee representatives should be given adequate information and time to respond. The employer should also consider any proposals made during this process.
What would be considered an unfair dismissal?
In a redundancy situation both the process and the reason for the dismissal could be deemed unfair by a Tribunal.
Examples of what could render a redundancy procedurally unfair include:
- A failure to warn and consult the employee;
- Utilisation of subjective or unreasonable selection criteria;
- A failure to consider whether there is suitable alternative employment.
An employer’s decision to dismiss must truly be for the reason of redundancy and the decision to dismiss must be reasonable in light of all the relevant circumstances such as size and resources of the employer.
Top tips for a business that is facing the prospect of making a redundancy
The number one tip we would give to a business is to plan. If you are thinking of making redundancies make sure you have a procedure and follow it.
As a part of your procedure, make sure you inform and consult your employees sufficiently.
Always carefully consider your basis for selection and assess how it will be applied to individual employees.
Always consider alternatives to redundancy and alternative suitable roles available in your organisation.
**Please note, these answers are taken from our involvement in the Law Society‘s weekly twitter chats.**
Redundancy Legal Advice
Morrish Solicitors are a reputable Law Firm based in West Yorkshire. We provide clear, honest and fair legal advice to Trade Unions, their members and private clients. Our specialist solicitors are able to advise you on all areas on employment law.
For more information read our article on everything you need to know about redundancy.