Redundancies: Your Legal Responsibilities

Making a worker redundant isn't as simple as doing the act and nothing else. There are many legal responsibilities that must be upheld as well. This page will take you through them.

Furlough has been vital during the pandemic in ensuring businesses can continue to pay their employees as an alternative to redundancies. April spelled the end of the Furlough Scheme and as such, many employers may be facing some difficult decisions. Unfortunately, as businesses assess their bottom line, redundancy may be the only option for those struggling with the ongoing impact of the crisis. That said, more than a third of employers have admitted to being unaware of their legal responsibilities. The repercussions of getting a redundancy process wrong can be wide reaching, with the opportunities for unfair dismissal claims likely triggered by various failings through the process. Therefore, careful planning is essential.

So, when is an employee redundant? An employee is redundant if the reason for their dismissal is wholly or partly caused by any of the following:

• Employer is stopping the business for the purpose that the employee was employed.
• Employer is stopping the business in the place where the employee is employed.
• The requirements of a particular kind of work within the business has ended or reduced.
• The requirements of a particular kind of work in the place where the employee was employed has stopped or reduced.

What are the key elements of a fair redundancy process? It’s very important that the selection criteria you use to ‘score’ staff against to determine who will be dismissed for reason of redundancy, are well thought out and easy to understand. For redundancies to be regarded as genuine, you need to ensure that the selection criteria are both objective and fairly applied. You also need to be able to demonstrate that the employee’s job will no longer exist of course.

Fundamental to the fairness of any redundancy process is consultation with individual employees. This process must be meaningful and include an explanation of why you are considering redundancies, a willingness to listen and consider employee’s responses and consider alternatives to avoiding or reducing the redundancies. Engaging the employees in the process is important, so allow them to make suggestions, give feedback and feel listened to.

Of course, redundancy consultation is an emotive time for all concerned so don’t be surprised if you receive an emotional response from employees, including those you are retaining. Bear in mind, that they will be more likely to find this difficult process easier to handle if they know why decisions are being made, and that they have been made in a fair and considerate way. An important part of the redundancy process is for the employer to seek out suitable alternative employment opportunities within the business. Clearly within micro-businesses, this is rarely possible but in others there should be a genuine attempt to look for and offer suitable alternative employment to affected employees where it exists.

Although there is no obligation in law, to allow employees the right of appeal against a redundancy decision, it is nevertheless good practice and is recommended by ACAS. Should this happen, the employer would hear the appeal and following that confirm in writing the outcome, making it clear that the decision is final. It may serve to fend off any claims for unfairness, given that a reiteration of the reasons behind the decision can be made on appeal.

The redundancy process is complex, and remember, a process that is poorly handled will not only adversely affect the employees concerned but are also a risk to you as a business in terms of conflict, unfair dismissal claims, low morale of retained employees and damaged employer reputation. You need to be conducting the process legally, so it is recommended you seek HR support if you are unsure of employee rights or you are concerned about an employee making a claim. Please get in touch with heidi@skorahr.co.uk if you have any concerns or questions around the redundancy process.

For more information on the writers of this article, Skora HR, click here.