When may a redundancy situation occur?
A redundancy situation occurs when the requirements of a role have ceased or diminished or is expected to do so. This could be caused by many factors such as the closure of a business, restructuring of a team, downturn in work or loss of contracts.
If the location of a role changes outside the parameters of any contractual relocation clause (or the contract does not include a relocation clause) a redundancy situation would also likely occur.
An employee may also request redundancy even if they have been on a period of short time working or a temporary lay off for 4 weeks, or 6 or more weeks within a 13-week period.
What is the process for making staff redundant?
Once a genuine need for redundancy has been established, staff should be informed and placed at risk of redundancy. A consultation process will then commence, the process of which will depend on the proposed number of redundancies. As part of the consultation process a range of topics must be covered including the reasons for the proposed redundancy and the selection criteria. The notice period and redundancy pay that would be provided should a redundancy be confirmed should also be discussed at this time.
Written communication should be provided at each stage to clarify points discussed, and provide a paper trail of the consultation process.
Is a consultation process necessary?
For a fair process a meaningful consultation must take place with those who are at risk of redundancy. Staff must be able to put forward suggestions for the business to consider as part of this process. During the consultation process staff will also be provided with information on the criteria used for selecting roles/individuals for redundancy. Failure to consult with staff will leave a business liable to unfair dismissal claims.
What is collective consultation?
Where 20 or more redundancies occur in a 90-day period, collective consultation is also required. Employees will be represented by elected representatives or trade union representatives as part of collective consultation, there will still be the requirement to meet with staff individually.
Where this level of redundancies are proposed, it is a legal responsibility for the business to inform the government of the anticipated redundancies.
How long should the consultation period be?
Where less than 20 redundancies are proposed, there is no set timescale for the consultation period. However, businesses must ensure that meaningful consultation takes place, with any suggestions from employees considered and answered during the process. Staff should be provided with a minimum of 48 hours’ notice ahead of consultation meetings so this should be factored into any timetables.
Where there are between 20 and 99 redundancies 30 days is required between the process commencing, and the first redundancy notice being served. This period increases to 45 days where 100 or more redundancies are proposed.
Are staff entitled to redundancy pay?
Staff with over 2 years’ service will be entitled to statutory redundancy pay as a minimum. Statutory redundancy pay is based on the employee’s age, length of service and weekly pay. Weekly pay is based on the average an employee earned per week over the 12 weeks before the redundancy notice is served.
A written statement providing details of the termination and how the redundancy pay was calculated, must be provided.
How can Lovewell Blake support employers with redundancies?
Our HR consultancy team can help throughout the redundancy process. From assistance with defining selection pools and selection criteria, through to calculating redundancy pay. We are able to assist with consultation meetings, along with providing templates of documentation that is required throughout the process.