Redundancy procedure and business restructuring

Redundancy Checklist:

1. The first step of redundancy planning is to try to avoid redundancies altogether. Take a close look at your business. Are your people fully utilised? Would it be better to consolidate your business services and focus on the most profitable areas? Can costs be cut elsewhere without having to look at redundancies? What if sales picked up – could you cope with a reduced workforce? What would be the costs of losing valuable skills in the business?
2. OK – you have already considered the above but there is no room to manoeuvre. The next step is considering alternatives to redundancy. This not only makes business sense, but will help you score points at a later Employment Tribunal should there be a legal challenge to the process. Have you considered a pay freeze, reduction of overtime, or temporary lay offs? Perhaps there could be an agreed reduction of hours. You still need to tread warily as these matters often involve a change in contractual terms – however, many employees may be agreeable to this as an alternative to redundancies.
3. Assuming you wish to go ahead with redundancies, you need to plan the process. Depending on the size of your business and the number of staff affected you may well need to take on some additional resource to deal with matters. There will be a need to meet and consult with affected staff and also deal with issues of selection for redundancy and any appeals against dismissals. Who will conduct the various meetings and deal with each stage?
4. In respect of any dismissals there will often be the right for employees to bring claims at an Employment Tribunal. This is likely to happen if an employee feels that the process has been unfair – you will need to be able to identify that a redundancy situation existed and was the actual reason for dismissal. Not only this, you will need to demonstrate that you “acted fairly” in reaching the decision to dismiss. This can be difficult for employers.
5. “Acting fairly” means identifying which employees are affected, using objective and fair selection criteria, consulting with affected staff, offering suitable alternative employment and considering any appeals against dismissal. Our more detailed redundancy guide explains a little more about these steps.