The Backhouse Solicitors Simple Guide to Redundancies

Many businesses will at some point find themselves facing the difficult decision to make redundancies. Whether part of a broader effort to manage costs or to restructure operations, redundancies have a significant impact on both employers and employees.

It is important for employers to be aware of and follow the standard procedure for making redundancies and for employees to understand their rights. This helps to make the process as easy and fair as possible for all concerned.

In this simple guide, we take you through employer responsibilities, employee rights and how to ensure the process is handled fairly and lawfully.

Redundancy is the process of removing an employee from a business when their role is no longer required. It is important to note that an employee’s job performance does not determine if they are made redundant; the process is instead largely attributed to their employer.

Some of the most common reasons for redundancy include:

• Business closure
• Office closure
• Financial pressures on the business
• Organisational changes
• Evolving business needs

As an employer, putting employees through the redundancy process can be difficult, particularly if you have a good relationship with your workforce. Nevertheless, it is critical that you follow the correct process and fulfil your legal obligations, or you may open yourself up to expensive and time-consuming claims from employees.

1. Redundancy Pools – You must determine which roles are at risk and establish “pools” to group employees fairly
2. Criteria – It is vital to use objective and non-discriminatory criteria, avoiding any bias based on a protected characteristic (for example, gender, age, pregnancy or disability). Failure to do this can result in substantial Employment Tribunal claims
3. Consultation process – Each employee affected is entitled to a fair consultation. If you are planning to make more than 20 redundancies within one workplace within a 90-day period, you must follow the collective consultation rules
4. Transparent communication – It is always wise to provide clear, written communication throughout the process, explaining what happens next and the reasons for redundancy. This also gives you the opportunity to explore redeployment and alternative roles, as well as communicate redundancy packages and notice periods
5. Payments and Notice – Dependent on your contracts of employment, notice periods may differ between staff, as well as the amount of redundancy pay employees will receive outside of the statutory amount.

Your employees are entitled to paid notice, and usually to a redundancy payment. If you don’t follow the necessary procedure, redundant employees may have grounds to claim unfair dismissal.

Redundancy can be extremely stressful for both employers and employees, and any support and communication you can give to your employees will be appreciated.

If you are an employee facing redundancy, you may be entitled to a statutory redundancy payment. The amount paid will be based on your age, pay rate, and length of service. If your employer refuses or is unable to make this payment, you may also write to the Secretary of State for a redundancy payment out of the National Insurance Fund. You will always have the right to contractual notice, and you could also be entitled to time off to look for work.

Furthermore, you have the right to appeal against your redundancy. You might be able to challenge your termination as an unfair dismissal; for example, if it is based on a protected characteristic such as age or pregnancy, if you have acted as a Trade Union representative, or asserted your right to the National Minimum Wage.

There are many situations in which your dismissal would automatically qualify as unfair, and it is important for you to know if you are eligible to make this claim.

At Backhouse Solicitors, we have been providing specialist redundancy advice to both employers and employees for many years. We understand the nuances of each situation and are here to guide you through every step of the process.

Whether you’re navigating redundancies in your business or facing redundancy yourself, our knowledgeable and approachable team is ready to help.

Tel:      01245 893400 | 01702 410880
Email: info@backhouse-solicitors.co.uk
Visit our Chelmsford office: 17 Duke Street, Chelmsford, Essex, CM1 1JU
Visit our Leigh-on-Sea office: 22-24 Elm Road, Leigh-on-Sea, Essex, SS9 1SN
Or send us a message through the Contact Us page on this website