With many businesses continuing to navigate rising costs, changing employment law obligations and evolving workforce needs, redundancies remain a reality for many employers.
A flawed procedure can transform an otherwise legitimate business decision into an expensive and time-consuming tribunal claim. Employers are expected to consult meaningfully, apply fair selection methods and consider alternatives before making any final decision.
Here are five common redundancy mistakes employers make and how to avoid them.
1. Announcing Redundancies Before Doing the Groundwork
Redundancy processes often start with an announcement, and only afterwards do some employers start to consider issues such as who may be affected, how employees will be assessed or whether there are alternatives to dismissal.
Before anyone is placed at risk, employers should have a clear strategy for managing the exercise and addressing potential legal issues.
2. Choosing the Wrong Selection Pool
Before any selection takes place, employers must decide who should be included in the redundancy exercise. This can be one of the most challenging aspects of any redundancy exercise. Employees performing similar or interchangeable roles may need to be considered together, and a selection pool that is too narrow can leave the process vulnerable to criticism before it has properly begun.
3. Deciding Who Is Leaving Before Consultation Begins
A common mistake is identifying the employees who will be dismissed before any meaningful consultation has taken place. Employees should have an opportunity to comment on the business rationale, ask questions about their inclusion in the selection pool, discuss their provisional scores and suggest alternatives to redundancy. If consultation appears to be a box-ticking exercise to support a decision that has already been made, the employer may struggle to defend the fairness of the process.
4. Looking for Alternative Roles Too Late
Employers are expected to consider whether dismissal can be avoided.
The search for alternative employment is sometimes treated as an administrative exercise that takes place shortly before an employee is notified that they have been selected for redundancy. That search should begin much earlier. Redeployment opportunities, retraining, voluntary redundancy and vacancies elsewhere in the business or wider group should be explored throughout the process. Employers who leave these discussions until the final stages may find it difficult to show that redundancy was genuinely unavoidable.
5. Taking Your Foot Off the Pedal Too Early
Selecting employees for redundancy is not the end of the process.
Employers often focus significant time and resources on consultation and selection, only to underestimate the importance of the final stages. Decisions should be communicated clearly, employees should understand how and why those decisions have been reached, and any appeal should be given proper consideration. In redundancies involving 20 or more employees, employers are also likely to have collective consultation and notification obligations, which run alongside individual consultation requirements.
Summary
Redundancy is one area of employment law where a well-intentioned employer can still find itself defending a tribunal claim.
Getting the process right from the outset is usually far easier and considerably less expensive than trying to fix problems after employees have already been placed at risk.
If your business is considering a restructure or redundancy exercise, early advice can help identify risks before they develop into claims. Please contact Catherine Morris and our Employment Team for further information.