It’s a difficult enough time when your business is faced with reducing staff numbers; particularly as it’s very often for reasons out of your control. Emotions are high on both sides, whether as an employer and an employee, with those affected sometimes feel extremely distressed. The turmoil and the perceived time pressure to conclude the process often leads to a lot of costly mistakes by the employer
Redundancy legislation and case law is complex. An employer must understand their obligations, both in procedure and employee rights. In the recent Covid upheaval, the employee rights haven’t changed and whilst redundancy situations will be more common, a fair process still needs to be adhered to.
Here are some of the common mistakes that employers make in the process and decision making around redundancy.
Non-consideration of the “pool”
In all redundancy cases, it is the role which is made redundant, not the person. The result of the role being no longer needed, then affects the job holder. A good example is where there is a case of diminishing workload and say, where there are 3 job posts and you only need 2. It would be easy to just choose an underperforming employee for redundancy and ignore the other two role holders. An employer must consider all employees who could potentially be affected “the pool” and identify a fair selection criteria to the whole of the pool.
Failing to Consult
No doubt, an employer will have considered all the options they feel are viable as an alternative to redundancy and have concluded that there is no other choice. In all cases, the employer has a legal obligation to consult with employees regardless of any firm views they have. If an employer is making more than 20 employees redundant, they must consult collectively, i.e, as group or with representatives of that group. Regardless of final numbers, each employee is entitled to a formal, individual meeting.
Ignoring the Right to be Accompanied
The employee at risk of redundancy has the legal right to be accompanied at their individual meeting by a union rep or a colleague. Many employers fail here by not allowing the employee enough notice of the date and time of the meeting for the representative to attend, or by ignoring the right altogether.
Miscalculation of payments
A redundant employee may be entitled to Redundancy pay, notice pay and accrued holiday/benefit pay. The notice period must be paid at the normal rate of pay. If an employer does not wish the employee to work the notice period then a payment in lieu of the notice period may be made. Accrued holiday pay and other relevant payments must be calculated to a “relevant date” which can be a date after the formal date set for the end of employment as it must take into account the notice period. It’s easy for an employer to slip up with the calculations at this stage and to miscalculate the termination package.
Not allowing an opportunity to appeal the decision
Every redundant employee has the right to appeal the decision to make them redundant and this right should be set out in the formal notification of the termination. Should an employee appeal the decision, then a formal process should be followed, with a formal meeting to explore the employee’s concerns.
The obligations for the employer are huge in the redundancy process and the management of the situation is often difficult. Anxiety levels, not only for those affected, but also those who remain in employment are high. The immediate priority is for a fair, sensitive and legally compliant process to be undertaken and for reassurance to be given to those who are remaining in employment.
If you’d like to discuss any further questions you have on Redundancy please call our Associate Nicola Quayle on 07624 481335 or visit Nicola’s website at www.positivesolutionshr.com.