Avoid legal pitfalls when making staff redundant
It’s around a month since the end of the furlough scheme and many firms will still be weighing up their staffing requirements. They may be considering letting staff go if the business has been adversely affected and shows little sign of picking up.
Employers must carefully follow Government guidelines as to how to process this or else find themselves in trouble, possibly at an employment tribunal facing an unfair dismissal case.
If in doubt consult your legal employment adviser.
Here are some guidelines about the process, set out by the Advisory, Conciliation and Arbitration Service (Acas).
In the first instance you could:
- Offer voluntary redundancy
- Change working hours
- Move employees into other roles
- Let go of temporary or contract workers
- Limit or stop overtime
Inform employees
As soon as possible you should hold a meeting with all employees affected, not just those at risk of redundancy, where you explain:
- The risk of redundancy and the reason why it may be necessary
- How many redundancies you’re considering
Hold redundancy consultations
If you do not hold genuine and meaningful consultation before making redundancies, employees could claim to an employment tribunal for unfair dismissal.
Select employees for redundancy
If you’re making a whole team or specific group of staff redundant, you’ll have already identified clear criteria and list of roles you need to make redundant.
But if you need to reduce the number of employees in the organisation or team, you’ll need to set up selection criteria and make a list of roles to be considered for redundancy (a ‘selection pool’).
Work out redundancy pay
You must pay at least the legal minimum (‘statutory’) amount of redundancy pay to your employees who have worked for you for at least 2 full years.
You should check your employment contracts as they might say you need to pay more than the statutory amount.
You can choose to pay higher amounts if you want to encourage voluntary redundancies.
Use the redundancy pay calculator on GOV.UK.
Give redundancy notice
You should meet with each employee who’s been at risk of redundancy and allow them to be accompanied at the meeting. For those selected for redundancy, you should also put the details in writing. This can be by letter or email.
You should include:
- How they scored in the selection criteria and why they received that score
- Notice period and leaving date
- How much redundancy pay they’ll get and how you calculated it
- Any other pay due to them
- When and how you’ll pay them
Offer an appeals process
It’s good practice to offer employees the chance to appeal if they feel they were selected unfairly for redundancy. This should be set out in your redundancy plan.
Offer alternative employment
You must try and move employees selected for redundancy into other jobs within your organisation instead.
You must identify any available jobs in your organisation and talk to the affected employees to see if they agree they’re suitable.
The above are guidelines so for help and advice on employment matters, contact our expert team at AGS HR Solutions today to discuss your requirements.
