How can a business avoid the top three most common mistakes in a redundancy process?


14 October 2020

By Alexandra Dean

Here at Gepp, we appreciate that sometimes businesses have to make the tough decisions of making redundancies in the workplace in order to save costs. We know that it is not easy and we did write about some of the ways that the business is affected by more than just the fact that employees are leaving.

So, what are the common mistakes and how can you avoid them?

Mistake #1 – Not having a genuine redundancy situation

This sounds quite obvious, but unfortunately we have seen it happen. Sometimes, employers will seek to undergo a redundancy exercise to reduce the workforce and even get rid of underperforming employees. This must be avoided at all costs, not least because it could lead to claims of unfair dismissal!

How to avoid it?

Easily, make sure that there is a genuine redundancy situation. This means that one of the following applies:

  • The employer ceases or intends to cease to carry out the business for which the employee is employed;
  • The need for employees to perform work of a specific kind has ceased or expected to cease; or
  • The need for employees to perform work of a specific kind in a specific place has ceased or expected to cease.

It is also recommended that the business considers any and all other alternatives available to it instead, is redundancy really the correct route to go down?

Mistake #2 – Not conducting a meaningful consultation process

Sounds obvious, a redundancy process requires proper consultation. This means that the employees that are at risk must be notified in advance and be involved in the process to include any proposals from them to avoid redundancies and consideration of alternative employments.

How to avoid it?

Make sure that you start the consultation in good time and it is not rushed. We know that these are not easy decisions and sometimes they are made last minute, but in the grand scheme of things, a slight delay in bringing this to a close could help avoid a host of issues from disgruntled employees spreading negative feedback on their experiences to even bringing Employment Tribunal claims of Unfair Dismissal on the basis of unfair redundancy.

It is also important to ensure that the consultations are actually meaningful and that the employees are engaged in a two-way conversation as opposed to just being 'talked at' and being read to from a script. On this point, it is worth considering whether the managers carrying out the process are sufficiently trained in having those conversations or whether they require further training or support.

Equally as important, consider whether a collective consultation is required before the individual consultations – this will be relevant for when there are at least 20 employees being made redundant in any 90 day period (side note the number of redundancies expected will also impact the length of the consultation under the legislation).

As a bonus thought, having a meaningful consultation might even mean that employees bring up suggestions to avoid redundancies that have not yet been considered by the business. There is no shame in admitting that and considering it once it is raised!

Mistake #3 – Not properly considering alternative employment for employees

Employers have the duty to consider suitable alternative employment for employees that are facing redundancies. There are no two ways about it. Some employers will just provide the employees with a list of all of the internal vacancies and leave them to it, others will not offer certain vacancies to certain employees because of assumptions on behalf of the employees (e.g. that they would be unwilling to relocate, or to have a slight career change if their skills are transferable).

How to avoid it?

Make sure that all alternative options are considered and do not write off opportunities on behalf of employees. Engage with the affected individuals on which vacancies are available in the business and whether or how they might be suitable for those employees. Is it not worthwhile to keep good talent within the business if possible?

Employment Law Enquiries

If you want to discuss this or any other employment law issue within your business, please do not hesitate to contact Alex Dean on 01245 228141 or by email.

This is not legal advice; it is intended to provide information of general interest about current legal issues.