Today we wanted to provide you with a redundancy guide article to help you as an employer. An employee is dismissed by reason of redundancy if the circumstances of their dismissal fall within the definition of redundancy set out in s.139 of the Employment Rights Act 1996.
These are 5 key steps businesses are expected to follow during a redundancy procedure:
Redundancy Guide: 5 Key Steps
Stage 1: Preparation
- Assess whether a redundancy is necessary
- Identify your time frame to complete the disciplinaries
- Prepare the appropriate documentation
Stage 2: Selection
- Select the pool of people under consideration for redundancy
- Determine the criteria you’ll to select the individuals
Remember: It needs to be fair and applied equally
Stage 3: Consultation
- In your consultation with the employee you should explain
- The risk of redundancy and the reason why
- How many redundancies you’re considering
- If there are alternative employment opportunities
- Next steps and how they’ll be consulted
- You should also confirm what was said in writing to the employee
Stage 4: Notice
- Write to the employee to inform them of the dismissal
- Explain that they have the right to appeal
Stage 5: Termination
- Employee with 2+ years’ service qualifies for statutory redundancy payments
- Provide employees with a written record of how the payment is calculated
Remember: Communication is key and will help ensure your redundancy is fair
Important insights in this Redundancy Guide
Statutory Rights During a Redundancy
The following is the statutory rights that employees and employers have during a redundancy:
Family friendly leave
An employee who is made redundant while on maternity, adoption, or shared parental leave is entitled to be offered suitable alternative employment in preference to other employees.
The right to paid leave
An employee who has been given notice of dismissal by reason of redundancy is entitled
to a reasonable amount of paid time off work before the end of their notice period to search for new employment.
An employee is entitled to a statutory redundancy payment if they:
- are an employee;
- have been continuously employed for not less than two years;
- have been dismissed; and
- were dismissed by reason of redundancy.
Exclusion of redundancy payments
An employee is not entitled to statutory redundancy pay if:
- You employ them in a different role
- The employee refuses the suitable alternative role without a good reason
How can SafeWorkforce help?
We can support by advising you through the various steps to take, provide HR Guides and the relevant template letters and documents you need. We can also explore alternatives to redundancy that we might identify during the call. We appreciate that due to current cost of living crisis, many employers are struggling with rising energy costs etc. but given the time and cost of making redundancies (redundancy pay, notice, holiday etc.), exploring alternatives first is sensible.
It is important you follow the correct steps otherwise you run the risks highlighted above. If a matter did end up at tribunal, there is not only the cost of legal representation and compensation if you were to lose the case but also the management time preparing and attending as witnesses.
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