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Having to Consider Redundancies?

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weather vane
Aug, 2020

Having to Consider Redundancies?

Posted by Helen in Redundancy Issues


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.:  

  • Seeking volunteers for redundancy if there may be people who are interested from the right areas, but reserving the right to accept or decline applications so that you can evaluate the potential loss of skill, knowledge and experience etc. to the business
  • Redeployment where alternative vacancies exist
  • Reduction or elimination of overtime working where possible
  • Restricting recruitment of new staff as far as possible


Defining Redundancy

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: 

  • The employer has ceased, or intends to cease to carry on the business for the purposes of which the employee was so employed; or
  • The employer has ceased, or intends to cease, to carry on the business in the place where the employee was so employed; or
  • The requirements of the business for employees to carry out work of a particular kind has ceased or diminished or are expected to cease or diminish; or
  • The requirements of the business for the employees to carry out work of a particular kind, in the place where they were so employed, has ceased or diminished or are expected to cease or diminish.


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 

Selection criteria must be applied where there is a pool of employees doing the same/ similar role.  Examples of selection criteria include: 

  • Attendance record
  • Disciplinary record
  • Experience
  • Job Knowledge
  • Job Performance

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.


Redundancy Consultation

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.