Redundancy: Getting it Right

Recent months have seen a 60% rise in redundancies, a number of which have made local headlines in Northern Ireland. Notably, the P&O Ferries saga illustrates how easily it is for employers to fall foul of the law if they do not follow a carefully managed process and check current legislation when making redundancies. There are a number of key considerations employers should follow to help them avoid employment tribunal claims and ensure a fair process when making redundancies.

Following a fair procedure

Where small-scale redundancies of fewer than 20 employees are proposed, collective consultation obligations do not apply. However, it is still important that a fair procedure is followed before giving the employees notice of termination otherwise employers may be faced with unfair dismissal claims.

Employees must receive adequate warning of redundancy and employers must ensure meaningful and genuine consultation occurs before any proposed dismissals take place. This is likely to involve several consultation meetings before any decision to dismiss is made and communicated.

Consultation should include consideration of how the redundancies might be avoided or their effects mitigated. Employers should consider carefully and reply to any representations made by the employees during the consultation process. Even if it seems unlikely that another outcome can be reached, the consultation must be seen to be genuine and not a sham. Employers should not enter into the process with a closed mind to possible alternatives to redundancy.

Selecting employees for redundancy

While it is good practice to ask for volunteers before making compulsory redundancies, employers should ensure they can refuse any volunteers they do not want to lose. Any method for selecting the employees to be dismissed must be fair and free from any taint of discrimination. This will include watching out for any selection method that could indirectly discriminate on the basis of disability or age. Employees should be able to understand why they have been selected and, if necessary, be able to challenge their selection during consultation.

Consideration should also be given to employees who are on sick leave or maternity leave as they need to go through the same fair process as other employees as much as possible. This will include being consulted with, and women on maternity leave must be offered any suitable alternative positions before other affected employees.

All employees in the redundancy process should be given a right of appeal against any decision to dismiss them as redundant.

Alternatives to redundancy

Employers also need to keep an open mind about finding suitable alternative employment for employees who are being made redundant. This extends to vacancies with associated employers; for example, other companies within the same group. It is best practice for employers to let staff know about all vacancies – even if these are more junior than the position they are leaving.

Any alternatives considered need to make commercial sense, but they will also assist with demonstrating that the redundancy is genuine.

In times of economic difficulty, employers may think they can short cut the redundancy process, especially when the business’s future is looking rocky. However, a tough economic environment does not mean that employers can avoid a fair redundancy process, and a poorly managed process will inevitably increase the risk of successful Tribunal claims which will be both expensive and time consuming.

If you have any questions about navigating redundancy processes, or any other query related to Employment Law, please feel free to get in touch with our Employment team.

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This article has been produced for general information purposes and further advice should be sought from a professional advisor.