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Topical Tips
124
September
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Last month
Topical
Tips 122 considered the definition of redundancy and some of the
problems arising from it. Having established a redundancy exists it is vital
that the correct process is followed before an employee is made redundant. If
this process is not followed an employer may face costly claims. It is not just
a case of getting the right answer, but going the right way to get that answer.
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Since October 2004 the law has required that a
basic process should be followed in most redundancy situations. One of the aims
was to keep matters simple and keep claims out of the Employment Tribunal.
However, these minimum legal procedures have been subjected to much criticism
as they have in fact led to an increase in Tribunal claims!
In essence the minimum process requires that the
employer: writes to the employee explaining that they are at risk of
redundancy; meets with the employee to discuss matters; and then if the
employee is confirmed as redundant, offers an appeal.
In reality, the situation is more complex than this
and as the minimum rules will soon be abolished, they will not be considered
further here. |
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If the redundancy goes to a Tribunal, the Tribunal will consider whether it was
reasonable to make an employee redundant and the employer will usually be
expected to have followed a more extensive process. This will include a proper
consideration of the need for redundancies.
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How many are to be made redundant?
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What sections of the workforce are the redundancies to come from?
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What factors are to be taken in to account when deciding who will go and who
will stay?
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Have these matters been discussed with those employees identified as
potentially redundant? (This must be a genuine discussion with proper
consideration given to what the employee has to say, including why the employee
was identified as potentially redundant and whether there are alternatives to
redundancy.)
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Different rules apply when the proposal is to make 20 or more employees
redundant at one establishment in a period of 90 days or less. They require the
employer to provide specified information to representatives of a recognised
trade union* and to genuinely discuss certain matters with them. Depending on
the numbers involved, the discussions must start between 30 and 90 days before
the first redundancies are to take place. Notice of dismissal cannot be given
until the process has completed. Failure to follow the process without good
reason can result in compensation of up to 90 days’ salary per employee
– so it is very important to get it right!
*If there isn't one, the alternative is elected representatives of the
employees. The rules specify how the election is to take
place. |
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Written notice of certain redundancies has to be sent to the Department for
Business, Enterprise and Regulatory Reform (BERR). If the proposal is to make
100 or more employees redundant at one establishment in a period of 90 days or
less, at least 90 days’ notice must be given before the first redundancy
takes effect. If the proposal is for at least 20 or more redundancies at one
establishment in a period of 90 days or less, at least 30 days’ notice is
to be given. |
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Follow the process
properly.
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Remember, taking shortcuts to save
time and money may seem attractive, but more often than not cost much more in
the long run.
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If you talk matters through with
your staff, not only do you minimise the risks of claims, you will end up with
the right workforce to take your business forward.
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Ensure you treat all staff the
same, as off the record chats with more senior members of staff could damage
the process.
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Topical Tips is designed to be a
simple and useful source of ideas and information for clients and contacts of
Barnes Roffe LLP. If you are unsure about the implications of any idea
contained therein please contact your Barnes Roffe LLP partner. Barnes
Roffe LLP cannot take responsibility if the ideas are implemented without its
involvement. |
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