Furlough has been vital during the pandemic in ensuring businesses can continue to pay their employees as an alternative to redundancies, says Heidi Skirrow of Absolute HR Dorset.
April spells the end of the Furlough Scheme and as such many employers may be facing some difficult decisions. Unfortunately, as businesses assess their bottom line, redundancy may be the only option for those struggling with the ongoing impact of the crisis.
That said, more than a third of employers have admitted to being unaware of their legal responsibilities[1]. The repercussions of getting a redundancy process wrong can be wide reaching with the opportunities for unfair dismissal claims likely triggered by various failings through the process. Therefore, careful planning is essential.
So, when is an employee redundant?
An employee is redundant if the reason for their dismissal is wholly or partly caused by any of the following:
- Business Closure (i.e. the whole business)
- Workplace Closure (i.e. a specific site, shop, office)
- Ceased or reduced requirements for employees to carry out work of a particular kind.
What are the key elements of a fair redundancy process?
Fair selection criteria
It’s very important that the selection criteria you use to ‘score’ staff against to determine who will be dismissed for reason of redundancy, are well thought out and easy to understand. For redundancies to be regarded as genuine, you should ensure that the selection criteria are both objective and fairly applied. You also need to be able to demonstrate that the employee’s job will no longer exist of course.
Meaningful Consultation
Fundamental to the fairness of any redundancy process is consultation with individual employees. This process must be meaningful and include an explanation of why you are considering redundancies, a willingness to listen and consider employee’s responses and consider alternatives to avoiding or reducing the redundancies.
Engaging the employees in the process is important, so allow them to make suggestions, give feedback and feel listened to.
Of course, redundancy consultation is an emotive time for all concerned so don’t be surprised if you receive an emotional response from employees, including those you are retaining.
Bear in mind, that they will be more likely to find this difficult process easier to handle if they know why decisions are being made, and that they have been made in a fair and considerate way.
Alternative employment
An important part of the redundancy process is for the employer to seek out suitable alternative employment opportunities within the business. Clearly within micro-businesses, this is rarely possible but in others there should be a genuine attempt to look for and offer suitable alternative employment to affected employees where it exists.
The right of appeal
Although there is no obligation in law, to allow employees the right of appeal against a redundancy decision, it is nevertheless good practice and is recommended by ACAS. Should this happen, the employer would hear the appeal and following that confirm in writing the outcome, making it clear that the decision is final. It may serve to fend off any claims for unfairness, given that a reiteration of the reasons behind the decision can be made on appeal.
Conclusion.
The redundancy process is complex, and remember, a process that is poorly handled will not only adversely affect the employees concerned but are also a risk to you as a business in terms of conflict, unfair dismissal claims, low morale of retained employees and damaged employer reputation.
It’s important to conduct the process legally, so we recommend you seek HR advice if you are unsure of employee rights or you are concerned about an employee making a claim. Please get in touch, if you have any concerns or questions around the redundancy process.
www.absoluteworks.co.uk/hr-dorset/ 01202 241763 heidi@absoluteworks.co.uk
[1] YouGov Poll Sept 2020
HR Dorset, HR Consultant, HR Support