Redundancy (employers and businesses)
There comes a point when an organisation needs to downsize or to change.
What is redundancy?
Redundancy is a potentially fair reason for dismissal, an economic one, which relates to the employer’s circumstances, rather than the individual employee. Redundancy can occur when you need to reduce the workforce, you no longer need certain work to be done or you close down all or some of the undertaking.
What must we do?
If you are considering making a large number of employees redundant then, generally you must inform and consult with the workforce (or their elected representatives) about the proposals. Generally, consultation is with all affected employees, even those who may not be at risk of losing their job but may be subjected to other changes.
If you are considering making only one or a few employees redundant, you should still consult with the employee or employees concerned and make sure that you are selecting employees fairly.
What about the cost?
Employees who have two or more years’ continuous employment should receive at least a statutory redundancy payment, either proper notice of the termination of their employment or a payment in lieu and receive their accrued holiday pay.
What’s the problem?
Since redundancy can only happen in a defined set of circumstances and there are procedures which you should follow, and even if you are considering making just one employee redundant, a slip up could mean that you face claims for unfair dismissal or discrimination, which can be expensive not only in terms of money but also reputational damage. When there is a large number of employees you could also be liable to pay a protective award.
How can Roberta help?
Roberta can support you along the way, from the process you need to adopt, to help with selection criteria, the documentation you need to give your employees, offers of suitable alternative employment and the calculation of the payments to be made, to avoid a costly mistake. If you are considering making an enhanced payment, Roberta can assist with a settlement agreement [link], to ensure that you achieve certainty.