Redundancy is defined as ‘dismissal for a reason not related to the individual concerned or for a number of reasons all of which are not so related’. The business must therefore terminate their employment and pay them redundancy pay and notice but they must follow the correct redundancy rules and procedure, and have a genuine reason for making staff redundant, i.e.:
• Cessation of business: has ceased or intends to cease carrying on the business for the purposes of which the employee is employed]
• Move of place of business: has ceased or intends to cease carrying on the business in the place where the employee is employed
• Surplus labour: no longer require the employee to carry out work of a particular kind because the work has ceased or diminished or is expected to cease or diminish
• No longer requires the employee to carry out work of a particular kind because the work in the place where they were so employed has ceased or diminished, or is expected to cease or diminish
An Employment Tribunal can investigate whether the redundancy is genuine, i.e. the real reason for dismissal. It is therefore worth considering the following points:
• Avoid the temptation to use redundancy as a way of managing a performance
• Do not be tempted to dress up a performance or capability dismissal as a redundancy issue as this could result in a finding of Unfair Dismissal Compensation
• Employees cannot challenge whether the employer acted reasonably in identifying the redundancy situation
• Where possible information about current challenges to your business should be shared to open up a dialogue with employees as to whether cutting overheads or restructuring via salary cuts, shorter working weeks, job shares or unpaid sabbaticals could save jobs
• You could also consider whether this is a situation where you can offer voluntary redundancies
Before you consider making staff redundant it is essential that you have the required employment law procedures in place – in particular an up-to-date Equal Opportunities and Diversity Policy which should be produced so that you do not make your organisation vulnerable to a potentially expensive Employment Tribunal claim. It is also recommended that you consult the Equality and Human Rights Commission’s Code of Practice when writing this Policy.
If you’re not sure what to do about dealing with staff – whether it’s with regard to redundancy, drafting equal opportunity or diversity policies or any other employment law issues – don’t take chances. Make sure that you get advice from a specialist employment solicitor. Our team of experienced employment solicitors are happy to provide any employer with free initial legal advice over the phone – so don’t take any unnecessary risks with regard to employment law – call us on 01722 422300 today.