Redundancy and Restructure

Redundancy situations or a restructure must be handled carefully and a fair procedure should be followed so as to avoid unfair dismissal claims. It may not be necessary to make any employees redundant at all as there are other options such as lay off and short time working, which may be preferable for your business and long term needs to protect the employees you don't want to lose.

The meaning of "redundancy"

An employee's dismissal must be "wholly or mainly attributable to" a:-

"business closure";
"workplace closure";
"reduced requirement for employees."

Redundancy Procedure

A fair redundancy procedure requires the following:-

Consideration as to whether it is possible to avoid the need for redundancies, for example, by restricting recruitment, considering alternative employment, voluntary redundancy, or restricting overtime;
A correct pool of employees from whom the redundancies will be chosen;
Consultation with employees over a reasonable period of time discussing ways of avoiding redundancy;
Selection criteria must be objective rather than subjective;
Select based on fair application and marking of the criteria;
Any suitable alternative employment for potentially redundant employees should be considered;
The right of appeal. Failure to consult employees - and their representatives if applicable - in a redundancy situation, the redundancy dismissals will almost certainly be unfair.

Right of Accompaniment

Employees have the right to be accompanied (by a trade union representative or colleague) at any meeting which may lead to their dismissal.

Statutory redundancy payment ("SRP")

Employees with at least two years' continuous employment are entitled to a SRP if they are dismissed by reason of redundancy. This is calculated based on the employee's age and number of complete years' service, and multiplied by the employee's gross weekly salary, subject to the current maximum (£430.00.)