A three-step guide to redundancy – Step 1 Placing employees at risk and selection

We have created a 3-step guide for employers on how to conduct a fair redundancy procedure.

This guide focuses on placing employees at risk of redundancy and using a fair selection criterion.

1. When considering redundancies, an employer will need to establish whether there is a genuine redundancy situation. This arises where there is a business closure, workplace closure or reduced requirement for employees to carry out work of a particular kind.

2. If there is a redundancy situation, the employer will need to work out how many proposed redundancies need to be made. Employers should also think about whether there are ways of avoiding redundancies through measures such as reduced hours, hiring freezes and restricting overtime.

3. If there is a proposal to make more than 20 people redundant from one establishment, the employer will need to start collective consultations with the recognised union (if they recognise one) or start the process of electing employee representatives. If there is a proposal to make fewer than 20 employees redundant, the employer will need to commence individual consultations. This will be covered in detail in “A three-step guide to redundancy - Step 2 Consultation”.

4. Employers will then need to choose an appropriate selection pool of employees for redundancy. There are no fixed rules about how the pool should be defined unless there is a collectively agreed or customary selection pool. Employers should, however, consider the type of work conducted by the employees, the type of work ceasing or diminishing and the interchangeable skills or functions of their employees. It may be that there is a pool of one, a narrow pool consisting of those doing a similar type of work i.e. all receptionists, or a wider pool consisting of those with interchangeable skills i.e. all administrative staff. We can assist you with selecting the pool of employees for redundancy depending on your business needs.

5. Once the pool has been considered, employers will need to provisionally choose a selection criterion. Typically, an objective selection criterion is used to measure variables such as performance, length of service, attendance and disciplinary/capability records. However, employers can use subjective selection criterion such as attitude provided this is measured fairly. Employers can then attach weightings to the criteria, reflecting their relative importance, but should be able to justify any such weightings. In addition, employers will need to avoid any criteria which are discriminatory or make adjustments where necessary. This is commonly the case with absence records, which may need to be adjusted to reflect a disabled employee’s absences which have arisen because of their disability. We can prepare and provide a selection criterion based on your requirements and guide you on how to measure, weight and moderate these to promote fairness in the redundancy procedure.

6. Employers should then inform the employees who may be affected and explain the reasons for the potential redundancies, the anticipated number of redundancies, the pool they’re being drawn from and about the proposed selection criteria. We can prepare the initial correspondence to those affected by the proposed redundancies.

Advice

Our employment team can advise on how to conduct a fair redundancy procedure and are currently offering a fixed fee redundancy package which includes bespoke advice and letters to affected employees for a fixed fee of £1,000 plus VAT If you need assistance or advice on the contents of this article, please contact Thackray Williams LLP who have set up a FREE Legal Advice Line to businesses and employees in the wake of COVID-19. Do get in touch on 020 8663 4127 if you wish to discuss this matter in more detail or require any further advice.