Redundancy and Restructuring

Redundancy can be a difficult and upsetting situation for all involved. Employers need to know how to handle the process of redundancy professionally and sensitively, to reduce the negative impact as much as possible.

Employment Advice for Restructuring Businesses

Redundancy is when you dismiss an employee because you no longer need anyone to do a specific job. It does not relate to any performance-based or personal issues with an employee. If you have concerns about an employee’s conduct or performance, you need to follow a disciplinary process or performance management process (internal link).

For a redundancy to be genuine, you must demonstrate that the employee’s job will no longer exist, or that the level of work in that role has significantly decreased. This might be because your business is:

Changing its business model;
Doing things in a different way that changes your staffing structure and needs;
Moving to a new location;
Undertaking a merger or closing down.

Redundancy legislation is complex, and it is vital to follow the correct procedure. The Employment Rights Act covers both the obligations of the employer and the rights of the employee. If employers misunderstand the law, or don’t follow the correct procedures, they may be liable for unfair dismissal claims at an Employment Tribunal.

To ensure you follow the correct procedures, our specialist redundancy solicitors can provide legal advice. Make your redundancy process as safe and stress free as possible by taking the best possible guidance for your situation.

How Loch can help

There are requirements set down in legislation that must be complied with. Failing to do so can allow employees to bring claims for a failure to consult with them.

Here at Loch, our specialists can help you to meet the legal requirements for redundancy. This might include:

Writing your business case to prove that cutting jobs is your only option;
Crafting your redundancy process, ensuring that you follow the ACAS code of practice to prevent legal errors;
Help you meet your legal duties, including seeing who qualifies for redundancy pay;
Consulting with employees, to save you stress and ensure that everything is conducted professionally;
Creating the right HR documents to reduce your risk of unfair dismissal claims.

Our experts are here to keep you safe even when you face your toughest HR challenges.

The redundancy process

What’s important to remember is that a person is not made redundant; it’s their position that is. In addition, varying terms and conditions is not necessarily a redundancy situation.

You must follow a fair redundancy process. This should include:

Consulting with staff (at least 2 – 3 weeks before dismissal); or
Collectively consulting with staff where there are 20 or more employees at risk of redundancy and follow the law on this.

You are legally obliged to explore the alternatives to compulsory redundancies, which might include redeployments, or offering voluntary redundancy.

Making someone redundant based on their age, sex, sexual orientation, marital status, disability, race, religion, or any other protected characteristic is unlawful under the Equality Act 2010.

It’s also automatically unfair to make an employee redundant due to their:

trade union membership;
part-time status;
pregnancy/maternity status.

In fact, the law currently gives women made redundant while on maternity leave the right to be offered a suitable alternative role in advance of their colleagues.

If an employee has worked at the business for at least 2 years less a week, they are protected from being unfairly dismissed. Employees with less than 2 years’ service can still bring claims for discrimination or whistleblowing if they are made redundant.

If you’re planning to make 20 or more employees redundant within 90 days, you must notify the government using an HR1 form. You will also need to conduct a ‘collective consultation process’. There is a process set out in law, but this can mean you could:

Reduce negative impact of the redundancies;
Have a process which will be more efficient;
Reduce the risk of tribunal claims.

The employees selected for redundancy (the selection pool) must be carefully identified. Firstly, identify the job category and the number of redundancies necessary (if not a unique role). Then identify all the employees who fall within that category (the pool). Lastly, select clear and objective criteria in order to determine which employees are at risk of being made redundant. Criteria might include: