Manage the legal risks of redundancy to ensure fair and lawful dismissal, and avoid costly tribunal claims.
At every stage of the redundancy process, employers are subject to intense scrutiny.
For redundancy to be lawful, employers are required by law to follow strict procedures and to treat their employees in accordance with their rights.
Failure to follow a fair and lawful procedure can be damaging to workforce relations and reputation and exposes the organisation to tribunal claims. While employees need at least two years’ continuous employment to claim a redundancy payment, they only need one year’s continuous service to bring a claim for unfair dismissal.
Taking specialist advice from the outset can help protect your organisation from the legal risks of making redundancies.
Redundancies are lawful where certain, relatively narrow conditions apply.
This can only be where an employer has ceased, or intends to cease, to carry on the business for the purpose for which the employee was employed; where there will be a relocation of the place of business from the place where the employee was employed; or where an employer requires fewer employees to carry out existing work, or there is less work for existing employees.
Employers cannot for example use the redundancy process to terminate employment contracts by reason of misconduct or poor performance.
Where redundancies are unavoidable, we provide specialist advice to ensure legal compliance through a fair, competitive selection process addressing key areas of risk including:
Advanced warning Employers are required to notify all potentially ‘at risk’ employees, including those absent from work due to maternity or sickness leave.
Selection pool To avoid allegations of discrimination or unfairness, employers are advised to develop and implement fair selection criteria against which all at-risk employees should be scored objectively.
Consultation Employers must enter into a meaningful and proper consultation process with affected employees. Failure to consult can render redundancies unfair, giving rise to tribunal claims. The format of the consultation will be determined by how many employees are affected. If less than 20 redundancies are being made within a 90-day period, there are no set rules but employers are advised to follow the same process as where more than 20 employees are being made redundant in a 90 day period – whereby employers are under a duty to hold collective consultations. Only after the consultation process has completed can you give notice.
Alternative roles Employers have to show they have made genuine efforts to ascertain whether suitable alternative employment exists within the organisation or any associated companies.
Settlement agreements Settlement, or compromise, agreements can be used to bring the employment contract to an expeditious end by mutual agreement. Negotiating and drafting of terms will be critical to ensure your rights are protected and enforced.
DavidsonMorris’ employment lawyers are experienced in guiding employers through all types of redundancy situations.
We understand the commercial realities that drive the need to make redundancies.
Supporting you from the outset, we work with management and HR teams to help you ascertain if the circumstances qualify as redundancy and if this is the only course of action open to you.
Where redundancy is necessary and unavoidable, we will guide you through the legal process with pragmatic advice and sensitive handling to ensure a fair and lawful procedure is followed and exposure to employee complaints is minimised.
We can advise your HR and management team on all aspects of redundancy, including:
Contact us for specialist redundancy advice for your organisation.
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