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Employer’s step-by-step guide to redundancy

02 July 2020
Employer’s step-by-step guide to redundancy

We have compiled an employer’s step-by-step guide to redundancy.

  1. Is there a genuine redundancy situation? If so, how many redundancies do you need to make? Is it a redundancy or a reorganisation scenario? Are there ways of avoiding redundancies?
  2. If proposing to make more than 20 people redundant from one establishment, you need to start consulting with your recognised union (if you recognise one) or start the process of electing employee representatives.
  3. Choose your selection pool and provisionally choose your selection criteria.
  4. Write to those who may be affected, explaining why you are considering making redundancies, setting out the anticipated number of redundancies and the pool they are being drawn from, inform them about the proposed selection criteria and explain the process and expected timetable.
  5. Invite volunteers for redundancies, explaining the terms of any enhanced voluntary redundancy package.
  6. Hold the first individual consultation meeting with each person affected. Explain the position again, give them the chance to comment on the selection criteria (or, if consulting collectively, do that as part of the collective consultation), and discuss voluntary redundancies. Consider any suggestions they make, and if you agree with their suggestions, do as they have suggested.
  7. Carry out the individual scoring using a selection ‘matrix’ and send each employee a copy of their score sheet. Tell them the break point, i.e. the score above which people’s jobs are safe. If consulting collectively, meet regularly with the representatives while all this is going on to discuss ways to avoid redundancies.
  8. Hold a second consultation meeting with all the employees who fall below the break point. Go through their scores with them and give them the chance to explain if and why they think you have underscored them. Listen to what they have to say. If you accept what they say, adjust their scores. If that moves them above the break point, pushing someone who was previously above it down underneath the break point, you need to hold this second consultation with the employee who has been pushed below the break point, allowing them to comment on their scores too. If you do not accept their arguments, make sure you keep a note of what they said and your reasons as to why you did not accept it. Discuss any alternative employment. Is there anything they would like to be considered for? Invite the employee to consider their position and get back to you within the next few days if they want to be offered or be considered for any particular role.
  9. If no suitable alternative employment has been identified and you have not revised their scores upwards, hold a third and final consultation meeting at which you tell them their selection for redundancy is now confirmed and you are giving them notice. If you have identified suitable alternative employment, explain and offer it to them. If not, tell them you will keep looking up until the date their notice expires. Explain their right to time off to seek new employment. Remind them that they should come forward at any time with suggestions for alternative employment. Explain calculations for their notice pay, redundancy payment and any other payments. Tell them when their final day of work will be. If they have any outstanding holiday, consider making them take it during their notice period. Make it clear whether you want them to work their notice or whether they can stay at home. Offer a right of appeal.
  10. Keep looking for alternative employment.
  11. When their notice period expires, make any outstanding payments (likely to be outstanding holiday pay, outstanding expenses and their redundancy payment).

It is imperative that minutes of meetings are taken, and all meetings should be followed up and confirmed to the employees in writing.

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