Avoiding the risk of a legal claim when making redundancies

September 21, 2022

If you are thinking about making an employee redundant, it is vital to follow the correct procedure to avoid the risk of an Employment Tribunal Claim.

This article takes a look at the steps you need to follow to comply with employment legislation if you are making up to 20  employees redundant.

The redundancy process for 20 or fewer employees

You will ideally have a redundancy procedure set out in your employee handbook or employment contracts. If you have not specified the steps to be followed, then you should go through the following points:

• Consider whether there are any alternatives to redundancy
• Set criteria for a selection pool of possible candidates for redundancy
• Ask whether anyone wishes to take voluntary redundancy
• Consult the employees who are at risk of redundancy
• Select who will be made redundant
• Give notice of redundancy and hold meetings with anyone selected
• Consider whether alternative work is available for anyone who has been selected
• Calculate the amount to be paid on redundancy
• Issue a redundancy notice

If you need to make more than 20 employees redundant, you will need to conduct a collective consultation. This process is not dealt with in this article, which focuses on the procedure for making up to 20 employees redundant.

Considering alternatives to redundancy

You can only make someone redundant when there is a job that you no longer need to be done. This could be because your business is changing or relocating.

You should consider whether any viable alternatives to redundancy exist, such as moving employees into different roles, stopping overtime or retraining.

Redundancy selection criteria

You need to identify a pool of individuals who could potentially be made redundant. This should extend beyond just those who carry out the job that is no longer needed and include those in similar jobs or who have similar skills.

You need to be careful not to indirectly discriminate against individuals when deciding which criteria you will use to select individuals for redundancy. For example, if you decide to select those who most recently joined your business, you could be selecting mostly younger employees, which could be classed as indirect discrimination on the grounds of age.

Common criteria for selecting individuals for redundancy include:

• Attendance records
• Disciplinary records
• Performance records
• Skills, qualifications, and expertise
• Length of service, provided this is not the sole criterion

You can use a system of scoring to give points to each employee. It is essential that this is applied in the same way for everyone.

Consulting employees at risk of redundancy

You are required to consult with employees who are at risk of redundancy. This should be a meaningful consultation where you advise the individual of the following:

• The reason you are making redundancies
• How many employees are at risk
• Which jobs are at risk
• How you will be selecting individuals for redundancy
• The procedure you will be following
• How redundancy pay will be calculated

Employees are entitled to have a colleague or trade union representative at the meeting with them.

Inviting voluntary redundancy

You can let employees know that you will consider voluntary redundancy. This should be offered to as wide a group as possible and you must make sure that you do not discriminate, for example, by singling out employees of a specific age.

If you receive volunteers, you do not have to accept them.

Meeting affected employees

Once you have held consultation meetings with employees in your selection pool, applied your selection criteria and decided who will be made redundant you should hold meetings with everyone who was in the selection pool. They can be accompanied by a colleague or trade union representative.

Those who have been selected should be advised of how they scored, when they will be required to leave, how much pay they will receive, how this was calculated and how they can appeal.

Issuing notice of redundancy

Notice should be given in accordance with the employee’s contract or, if this is not mentioned, then they should receive the statutory minimum.

If they have worked for you for between 1 month and 2 years, this is 1 week. For 2-12 years it is 1 week for each year they have worked. For more than 12 years, it is 12 weeks.

Contact our employment solicitors in Gloucester

If you are facing the prospect of making redundancies and you would like advice on dealing with the process fairly from an expert employment lawyer, please feel free to call our team.

Our employment and dispute resolution partner and solicitor, Alex Lyttle, deals with a wide range of employment law issues for businesses in all sectors, to include providing advice and representation during the redundancy process.

To speak to Alex, ring him on 01452 222 433, email him at alex.lyttle@tayntons.co.uk or request a call back.