The recent changes to the Furlough scheme have led many businesses to further review their organisational structure and consider making redundancies.
Here are some key points consider if you are looking to make redundancies within your business:
Preparation is key
Announcing potential redundancies can be a disruptive and emotive process in any organisation, get it wrong and the whole business can feel demoralised. Preparation is critical to minimalise the impact on employees and support the managers who will be undertaking the process.
Does you company recognise a trade union or staff council?
They should be involved at the early stages of planning redundancies. Involvement helps create buy in to the plans and they might be able to provide insight and experience from previous processes.
Do you have a timetable, proposal documents and letters ready to share with those impacted by the proposed changes?
Once announcements are made there is a very little time to build in the detail, we recommend as much as possible is done upfront. Be as detailed in mapping out how many people are going to be impacted, realistic time frames for consultation, interviewing employees in situations where there are more employees than roles available. Include logistics planning e.g. availability of private meeting rooms, locations for announcements, management travel if dealing with multi-site organisations.
How many employees are impacted by the proposed changes?
It’s worth checking on the definition of establishment to ensure there is an up to date interpretation as it can evolve during employment case law. Currently, it is a local economic unit (e.g. a branch of a store or an office location). However, there has been legal argument that it’s the whole of the business regardless of location, so additional legal advice might be necessary to ensure the appropriate level of consultation is carried out.
If fewer than 20 redundancies are being proposed (over a 90-day period in an establishment), there is no formal process required nor is there are specific timeframe. However, as best practice it’s recommended to adopt the three-stage approach to consulting with employees.
If between 20-99 redundancies are being proposed then you need to collectively consult with either a trade union (if one is recognised by the business), staff council or elected representatives. The collective consultation meetings will explore alternatives to the redundancies, address any questions and agree any selection process involved. Once the collective consultation period is concluded then individual consultation meetings commence as outlined above.
This consultation period must last 30 days before the first redundancy can be confirmed. If over 100 redundancies are being proposed, this consultation period must extend to 45 days before the first redundancy can be confirmed.
If it is proposed that more than 20 redundancies could occur, then the business needs to file an HR1 to the Redundancy Pay Services (part of the UK government).
Understand the process
How are you looking to reduce headcount? Is it just one role or a number of roles from a team? How will you select who is to be made redundant?
In situations where are more employees than jobs available then you will have to fairly assess and select who is going to be put at risk of redundancy. This can be via desk top assessment or via a selection process (interviews). We can advise on the right process for your business and plan with you on how to carry this out quickly and fairly.
Communication with employees
Do I need to meet with employees?
You will need to invite employees in writing to consultation meetings with reasonable notice and consider offering for them to be accompanied. Consultation meetings are the mechanism used to formally review and discuss the proposed changes and also confirm, if necessary, redundancy calculations and the end of employment.
How can we help?
We can provide:
- Expert advice as you consider if redundancies are necessary.
- Support in preparing to make announcements.
- Communication plans and materials.
- All documentation to ensure you are following the process correctly.
- Support and materials to managers in making announcements and holding consultation meetings.
- Support in carrying out a fair selection process.
- Calculations and costing of a redundancy process.
For more detailed information on redundancy, read our full guide.