Redundancy and Reorganisations
What is a redundancy?
Organisations are not static entities and on occasion you may need to complete a reorganisation of how you work. However, this could be a positive change, with you adding new roles and splitting responsibilities to help you grow. However, it can also mean closing all or part of your operations. No matter what the situation, you need experts to come alongside you to ensure that you execute this well as being made redundant is a form of dismissal. As such, there are regulations to ensure that this is done fairly.
What is a genuine redundancy situation?
Redundancy occurs where your dismissal is:
- wholly or mainly attributable to the fact that your employer has ceased or intends to cease to carry on the business for the purposes of which you were employed, or in the place where you were employed; or
- the fact that the requirements of your employer for employees to carry out work of a particular kind, or for employees to carry out of a particular kind in the place where you were employed have ceased or diminished or are expected to cease or diminish.
Examples of when someone may be genuinely redundant include:
- the work the person does is no longer needed due to a downturn of business, a new line of work which requires a different skill set, or a new process being introduced;
- when the employee’s job no longer exists because the work is being done by other employees;
- the workplace has closed because the employer has ceased trading or has become insolvent;
- the employer’s business, or the work the person is doing, moves to another location; or
- the employer’s business is transferred to a different employer (TUPE).
Even if there is a genuine redundancy situation, your employer must still follow a correct redundancy process (see below). This is because If not followed, the redundancy can still be deemed to be an unfair dismissal.
What process needs to be followed in a redundancy situation?
Fair selection criteria are required if you are proposing to reduce, but not remove, the need for work to be completed..
Gov.uk lists the following fair reasons for selecting employees for redundancy. These include:
- skills, qualifications and aptitude
- standard of work and/or performance
- disciplinary record
You can select employees based on their length of service (‘last in, first out’) but only if you can justify it. This is because it could be indirect discrimination if it affects one group of people more than another. For example younger employees could make up the majority of new starters which could lead to a claim of indirect age discrimination.
The law requires you to consult when making people redundant. The timeline varies depending on the number of employees being made redundant in any one establishment.
- Under 20 employees – no fixed timeline
- 20-99 employees – 30 days
- Over 100 employees – 45 days
Consultation should be meaningful and where collective consultation bodies are in place, should allow the representatives to come up with counter-proposals which then need to be seriously considered by the employer.
It is important to note that where there is a requirement to consult collectively, you should also continue to consult individually as well. This will normally take place once the collective consultation has taken place and will inform the employee what this means for them.
Don't forget the 'survivors'!
When completing a reorganisation, it is key to focus on those who may be losing their jobs as a result of the change. One of the biggest mistakes that can be made in a redundancy situation though is forgetting the survivors. After the decisions have been made about roles, ensure that you bring the remaining employees together to re-energise them. Don’t underestimate the impact that a reorganisation has on the remaining employees! You may need to change roles and processes as part of the programme. If so, our change management expertise will come in handy!
How can we help you with your redundancy programme?
Cornerstone Resources can help you at each stage of the redundancy or restructure process. This includes:
- Establishing the need for redundancies
- Creating fair selection criteria
- Supporting the consultation process and completing associated paperwork
- Completing redundancy calculations
- Helping affected employees access support to get alternative employment.
Who are Cornerstone Resources?
Based in South Manchester, Cornerstone Resources offer a complete HR service to businesses, charities and churches. Because we have over 40 years combined experience in HR, we can offer you an enviable combination of professional expertise and a service based on integrity and honesty. Best of all, we can save you time and money.
For more information on our offering, including cost effective Employee Relations support, we can help! For a no obligation consultation, call Rob today on 07494 161169 or Nicci on 07908 875146. Alternatively, click here to view our full range of services or the below button to email us and we will come back to you.
How we work
We will always complete our work to the best of our ability even if it costs us to do so.
We will be open and honest with you and will challenge a proposed course of action when we don’t believe it to be the best solution.
We will look to not just meet your immediate needs but to add long term value to your organisation.