Mon, 12 Dec 2022
With reports of more people facing redundancy in the coming months, No5's Andrew Rhodes explains everything employers need to know if faced with the possibility of making staff redundant.
If you are put in the position, as an employer, where you have to let some of your workers go, there are measures that are legally required to take place to ensure the process is fair. This must happen no matter the reason, including financial difficulties or simply no longer requiring the role. Below are vital steps, employers must follow once the decision to make redundancies has been made:
- When you have selected the positions that need to be reduced, you are required to inform those potentially affected. As well as informing employees, you must also contact their union. If your workers do not have one, then you can skip this step. You are required to consult with affected employees throughout the redundancy process and take on board any suggestions they may have for how to avoid their roles being made redundant;
- Once all of the necessary parties have been informed, you will then be required to decide the criteria by which employees will be measured to see if they will be kept on or made redundant. This could include assessing workers’ standards of work, experience or qualifications. You could ask employees to sit a test or attend an interview during this process;
- Once this has been set out and workers have been informed, you cannot deviate from it. If an ex-employee has evidence that an employer altered the redundancy selection criteria during the process, they can take them to the employment tribunal and claim unfair dismissal. This could result in the workplace being forced to offer the role back to the worker or having to pay a larger severance fee;
- The criteria set out by employers has to be fair and avoid any potential discrimination towards people with the nine protected characteristics. This includes race, sex, disability, pregnancy and maternity. The criteria must be fair, objective and measurable to prevent any discrimination. If an employee has evidence that the criteria was biased against one of the nine characteristics, they can take their ex-employer to the tribunal;
- Before you can make someone redundant, you are required to make reasonable efforts to obtain other employment within the business, which might include making them aware of other vacancies that they have the qualifications to fulfil. Once you have completed all of these steps, you can safely proceed with making staff redundant.
- When letting a worker go, you are legally required to give them a redundancy payment in line with their salary and length of employment. The amount is set out in law and depends on the employee’s age and how long they’ve been in their job. It is best to seek legal advice to discuss the correct amount. If a worker believes that they haven’t their full redundancy award, they can take their employer to the employment tribunal;
If you do not follow one of the required steps, you risk lengthy and expensive claims in which you may be ordered to pay a large sum of money or be forced to offer the claimant their job back. It is best to seek legal advice if you are unsure on the process surrounding redundancy.
More information can be found here.