Redundancy: A step by step guide

Making redundancies is never an easy decision but unfortunately comes part and parcel with running a business. Redundancy happens when you need to reduce your workforce and is a form of dismissal. Redundancies can come in two different forms; compulsory and non-compulsory and can be due to a number of reasons e.g. business restructure or liquidation. For more information on redundancies and employees rights, please head to the government website here

Redundancy can be a tricky topic to cover and handle. To help give you a guide on redundancy we’ve put together the below timeline: 

  1. How many redundancies do you need to make? 

It’s always best to avoid making unnecessary redundancies and instead look to move and restructure the business utilising employees skills in other departments. We would suggest having a general discussion with your employees to assess if they’re interested in other departments or developing alternative skills. 

  1. Begin liaising with your recognised union or elected employee representative.

You will need to do ‘collective consultation’ if you’re making 20 or more employees redundant within any 90-day period at a single establishment. There are no set rules to follow if there are fewer than 20 redundancies planned, but it’s good practice to fully consult employees and their representatives.

  1. Create a selection pool. 

One you’ve decided how many redundancies are required, you’ll need to create your criteria and selection pool.  

  1. Write to the selection pool. 

Within this email or letter you’ll need to explain: 

  • Why they’re potentially being made redundant 
  • The potential number of redundancies 
  • The selection pool 
  • The selection criteria 
  • A timeline of the redundancy process

It’s also helpful at this point to include the redundancy package available to the employee. 

  1. Host individual employee meeting.

Hosting a consultation allows your employees to make any necessary documents surrounding the selection criteria. This also gives you another chance to explain the situation. This meeting is also a chance to listen and hear alternative suggestions as well as discuss voluntary redundancy. 

  1. Score each employee. 

Once you’ve scored each employee, you’ll need to send a copy of their score sheet along with the selection pool’s anonymous scores. For some companies or for a smaller selection pool it might be best to indicate which quarter their score falls into instead.

For those of you collectively consulting, you’ll need to discuss ways to soften the impact and potential ways to avoid any unnecessary redundancies. Continual communication will help with future consultation meetings. 

  1. Consultation two: For any employees who don’t make the desired score. 

Discussing employees scores who have fallen below a certain breakpoint, gives employees a chance to explain and potentially boost their score. Following this meeting you’ll need to decide if you agree with what the employee has said and adjust their score accordingly. 

Following this first stage of second consultations, you’ll need to re-evaluate the employees above the break-point and host a second interview with any new employees who may have been pushed down below the break-point allowing them to also comment on their scores. 

Throughout this process you’ll need to make notes on the employees reasoning and why you agreed or disagreed with the comments. You’ll also be required to discuss alternative positions, departments and potential jobs. 

  1. Consultation three: Selection for redundancy is confirmed. 

If the revised scores are still below the cut-off point and alternative employment hasn’t been found or was deemed unsuitable, the next step is a final meeting to confirm redundancy and serve notice to them. This meeting will tell the employees:

  • Their right to seek new employment
  • Notice pay 
  • Redundancy pay 
  • Any other outstanding payments (holiday, expenses etc)
  • Their final day 
  • If they’ll be working or on garden leave 
  • If they’ll be working from the office or at home 
  • Discuss continuing to find them a job up until their notice period expires 

Alternatively, if you’ve found the employee another position within the business then you can explain the offer. 

  1. Continued job search. 

Keep evidence of your continued job search and keep trying to avoid redundancy until the very end. If you’re a larger company this would be the time to host another meeting to discuss steps moving forward and alternative employment. 

  1. Final pay. 

Once the employees notice period has expired and they no longer work for your organisation. All that’s left for you to do is clear up any outstanding payments. 

Finally, we would recommend always keeping a paper trail of everything ensuring you’re following up after verbal conversations. Should you need any support surrounding redundancy or redundancy and furlough leave, please get in touch