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Top five tips when considering possible redundancies
Companies having to consider potential redundancies seems to be constantly in the press, whether this is Deutsche Bank who recently hit the headlines after announcing a large-scale redundancy programme, or the threat of redundancies at Tata Steel in Newport, it is an issue which seems to be on a lot of companies’ strategic agendas. With some economists suggesting a post-Brexit recession, more businesses may need to think about reducing headcount in order to survive. I even attended a recent event where an economist was talking about the likelihood of a depression after 2020.
Redundancy processes are rarely easy for either an employer or an employee. In this post, we cover our top five tips for making redundancy processes as manageable as possible:
- A fair process – it is necessary (particularly where individuals have been employed for two years or more) for an employer to ensure that (a) there is a genuine redundancy situation; and (b) a fair procedure is carried out. Consultation must begin prior to firm decisions being made, particularly in the case of collective consultation processes involving 20 or more individuals (see below).
- Planning – advance planning is the key to any process and can help with clarity of communication (see below). Key factors which need to be considered before a process starts include:
- Whether roles are standalone or if they need to be pooled together.
- How is consultation to be undertaken – employers need to remember that where 20 or more employees are to be made redundant in a 90 day period, strict rules apply and consultation may need to start earlier. A failure to inform and consult in collective redundancy situations can carry a penalty of up to 90 days' gross pay per employee. Even where fewer redundancies are contemplated, collective or other contractual agreements might still require an employer to consult in a particular way
- How individuals might be selected, including what objective factors should be taken into account (see below).
- Whether managers need training or written guidance on how to conduct consultation processes.
- Communication – good and regular communication is essential during redundancy processes. Any redundancy process can make employees potentially feel vulnerable and anxious and the clearer the communication, normally the better. It can also be helpful to outline the planned timetable at the start so that individuals know what they can expect in terms of meetings and written communications; for example update Q&A documents, and face to face meetings.
- Selection Criteria – we often see selection criteria which are both subjective and framed in very general terms. It may not always be possible to use entirely objective factors e.g. sales performance or customer satisfaction data, but if more general criteria are being used e.g. future potential, then it is normally essential to describe how individuals will be scored against this criteria and what behaviours or actions will generate a particular score.
- Wider Support – employers may need to remind employees of the opportunities for support which are available, for example access to managers and HR, Employee Assistance Programmes, occupational health or outplacement services. Employees are entitled to take reasonable time off during working hours to look for a new job or to arrange training for future employment, some of which should be paid. It is also worth keeping in mind that employees who are not at risk of redundancy may also find processes difficult.
Brachers employment team offers support in planning and undertaking redundancy processes and employee or trade union challenges. If you need practical support, then our HR consultancy service, KentHR are here to help.
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