| Making Redundancies -Top Ten Tips |
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In times of recession, it is an inevitable fact that redundancies will be prevalent - and that will cause distress to both employees and employers, but it is important that the employer focuses on the redundancy process to avoid defending a claim against unfair dismissal and potential compensation awards to the employee. The AP Partnership Ltd have put together 10 top tips to avoid a tribunal. 1. Ensure there is genuine a redundancy situation. For an employer to make employees redundant they must meet one of the following: • Where the employer ceases business for which the employee was employed; • Where an employer’s requirement for a type of work ceases or decreases; Not being able to demonstrate a genuine redundancy situation will give much evidence to support an employee’s claim of unfair dismissal. 2. Identify how many redundancies are needed. This should be defined from the outset as different procedures apply depending on the number of redundancies that are forecast to be made. These procedures are as follows: • Twenty or more redundancies within a 90 day period will mean that BERR will have be notified; • Between 20 and 99 redundancies requires 30 days consultation before the first dismissal; • If more than 100 employees are to be made redundant then 90 days consultation is required before the first dismissal; • In addition, if more than 20 employees are to be made redundant then group consultation must occur with either trade union representatives or elected employees. 3. Pool selection. Where a reduction in numbers is necessary, employees in that category must be pooled and a matrix process introduced to assess the skills etc of the pool. This can be done using a skills matrix. Employees in the pool must have a similar function, eg. a sales team. Misplacing people in the pool will give rise to claims of unfair dismissal – ensure the pool is well defined. 4. Ensure the matrix is robust. The selection process will use a ‘matrix’ to analyse the pool and select employees for redundancies. At a tribunal, the criteria used in the matrix and objectivity of the marking will be scrutinised – so this must be very clear. Beware of discrimination issues during assessments. 5. Follow the procedures. It is important that the employer follows correct procedures which require meetings and meaningful consultation before a final decision is made. Employees who are made redundant are entitled to appeal against the decision. 6. Look at redeployment. Employers are under an obligation to look for alternative employment within their organisation and discuss these with the employees. 7. Pay the correct redundancy monies. Once the employees have been made redundant they are entitled to a redundancy payment. To qualify for redundancy payment, two years’ service is required, the amount is then calculated by using the employees’ age, length of service and weekly wage – currently capped at £400. 8. Document everything. In the event that the employee made redundant makes a tribunal claim, the redundancy process will come under intense scrutiny – documenting everything in detail will ensure the employer can defend their actions. 9. Look at compromise agreements. This will avoid any claims of unfair dismissal, essentially the employee agrees to leave the company for an amount of compensation and not to lodge a tribunal claim. This can cost more money upfront but removes the risk of any subsequent tribunal action. 10. Be cautious when recruiting after redundancies. If the employer recruits shortly after making redundancies, it is recommended that the employees who were made redundant should be contacted and offered re-employment. If the ex-employees are not contacted then the redundancies may be seen as a sham and unfair dismissal claims made. |