Redundancy done properly: the process, step by step

Is it actually redundancy?

Redundancy is a genuine reduction in the need for employees to do work of a particular kind, or a closure of a business or site. It is not a way to remove an underperformer or someone you have fallen out with. If the role continues and you simply want a different person in it, that is a different process, and using redundancy for it is where many tribunal claims start.

The steps

• Establish the business case in writing: what has changed, what roles are affected, what alternatives were considered
• Define the pool: the group of employees whose roles are at risk, fairly and logically
• Set objective selection criteria: skills, qualifications, performance records, disciplinary records. Avoid anything that could be discriminatory
• Consult individually, and collectively where 20 or more redundancies are proposed within 90 days at one establishment, with the statutory timescales that apply
• Consider alternatives: redeployment, reduced hours, voluntary redundancy
• Confirm in writing with notice, redundancy pay and the right of appeal

Consultation must be meaningful. If the decision is already made before the first meeting, the process is unfair however well the paperwork is done.

Pay and notice

Employees with two years' service are entitled to statutory redundancy pay, calculated on age, length of service and weekly pay up to a statutory cap, plus contractual or statutory notice and any accrued holiday. Check the current statutory figures at the time, because they change each April. Enhanced schemes should be applied consistently.

The traps

• Pre-selecting people before the pool is defined
• Selection criteria that disadvantage people on maternity leave, part-timers or anyone with a protected characteristic
• Skipping redeployment because it is awkward
• Getting the collective consultation threshold wrong
• Announcing before consulting

Treating people properly

Beyond the law, how people are treated in a redundancy is remembered by those who leave and those who stay. Communicate early, be honest about the reasons, give people time and support, and do not leave them to find out from a colleague. It is the right thing and it protects the business.