Planning redundancies?
April 17 2008
Planning redundancies?
No-one starts, develops or manages a business with redundancies in the plan. But markets, fashions, legislation and technology all change. It is a rare organisation that can avoid an occasional unplanned need to adjust its workforce.
Talk of redundancies is hugely demoralising. It fosters disengagement, with adverse effects on productivity, quality and image. It is understandable therefore not to wish to discuss the matter until it is inevitable and, once in the open, to want it dealt with as quickly as possible.
Conversely the law expects possible redundancies to be discussed with employee representatives at the earliest stage and it puts specific obstacles in the way of resolving issues quickly. Failure to plan the redundancy process can lead to significant problems at Tribunal with protective awards, compensatory awards and even re-instatement.
The first step is to create a fair procedure and this really is best done before the emotion of actual redundancies. You need also to consider the selection criteria you will use. Such criteria must be non-discriminatory in a legal sense. Identifiable skills or knowledge needed in the business are wise criteria, as are disciplinary and objective performance criteria.
You should consult with all the individuals likely to be affected by proposed redundancies. Furthermore if you plan to make 20 or more people redundant, the procedure needs to include consulting with trade union or employee representatives. If you employ 50 or more people you have further obligations under the Information and Consultation Regulations. The aim of consultation is to reduce the impact of redundancies or to avoid them altogether. It is often surprising what can be achieved.
Offering alternative employment can be helpful and employees have a right to a trial period of 4 weeks. They cannot unreasonably refuse suitable alternatives and still claim a redundancy payment.
In addition to all this, if there are dismissals you must follow the statutory procedures; often known as the three step procedure: invite the employee to a meeting in writing; hold a meeting and confirm the decision; provide a right of appeal.
Finally, if you go the extra mile and do all you can to help employees re-train or find new jobs then you will find it easier to recruit when fortunes change.
