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Here we set out the key areas an employer needs to consider and work through to handle any potential redundancies.
Considerations before Redundancy
In the first instance the organisation should review alternatives to avoid redundancies, for example e.g.:
Employers must be clear on why a redundancy situation is proposed e.g. is there less work, has a contract been lost etc.
The official definition of redundancy is:
Collective Consultation Requirements
Where the organisation is proposing to make 20 to 99 employees redundant, collective consultation with a recognised trade union or elected representatives must take place for a period of at least 30 days before notice is served or before the first dismissal takes effect.
Where the proposal is to make 100 or more employees redundant, the collective consultation period is 45 days.
Selection criteria must be applied where there is a pool of employees doing the same/ similar role. Examples of selection criteria include:
Selection criteria may have weightings applied where specific importance is places on the particular criteria.
Assessment of employees within the pool against the criteria will be completed by at least two people (where possible). On completion of assessment, the scores of all employees within the pool for selection will be compiled and those ‘at risk’ of redundancy identified i.e. the lowest scoring people in the pool.
Employees have a right to be consulted individually about why they have been provisionally selected for redundancy.
Keep an open mind on potential option e.g. if two people offer to job share and this represents a cost saving it will be worth considering even for a work trial.
Always allow for several consultation meetings to take place with individuals before any final decision is taken.
Alternative Employment Options
During the consultation stage, those employees at risk must be provided with details of any alternative employment opportunities available.
Where an employee is successful in securing alternative employment, a trial period of 4 weeks is applicable and during this period the new terms and conditions of the alternative role are applicable.
At the end of the trial period should the employee or the employer find the alternative role unacceptable (and no other alternatives to redundancy have been identified), employment may be terminated on the original grounds and terms of redundancy.
If the alternative role is considered acceptable to both parties, the employee will continue in the role with any applicable terms and conditions of employment, and will retain their continuous service.
Statutory Redundancy Pay
Employees with more than 2 years’ continuous service have the right to receive statutory redundancy pay. This is calculated depending on their age, length of service and original weekly pay.
Notice and Other Entitlements
Where notice of redundancy is served, notice is paid to employees. If the contractual notice period is more generous than the statutory notice period (one week for each complete year of service up to a maximum of 12 weeks) then the greater of the two calculations will apply.
On termination of employment, employees are also entitled to be paid for any pro rata annual leave which they have not taken.