Taking employers through a redundancy process

For all sorts of reasons employers institute redundancy processes.  A common but tricky scenario is that several employees could be potentially at risk but the employer knows which one employee he wants to exit out. We take employers through the process they need to follow to avoid unfair dismissal claims.

From 6 April 2023, the maximum compensatory award for unfair dismissal will increase from £93,878.00 to £105,707.00.

Redundancy whilst on maternity leave

We advised an employer who wanted to terminate an employment contract while the employee was on maternity leave. The redundancy was as a result of a genuine re-structure.  The risk of claims against the employer in these situations is higher and employees can claim unfair dismissal as well as unlawful discrimination. We ensured that the employer took all the necessary steps to avoid a claim being made. This includes adequate consultation with the affected employee and an obligation on the employer to try and find a suitable position within the company.

Redundancy following a TUPE transfer

We advised the buyer in a commercial asset purchase of a hotel business.  A key consideration for the buyer was the automatic transfer of the workforce under TUPE.  Our client intended to effect a redundancy programme post completion of the asset purchase to reduce the costs and improve the profitability of the acquired business. We advised the client throughout pre-completion obligation to inform and consult and throughout the subsequent redundancy process. We protected our client from claims for unfair dismissal by using a settlement agreement with each departing employee.

Redundancy where employees are on a fixed term contract

We advised an employer in relation to employees on fixed term contracts. A redundancy situation arose and the issue was whether the employer could simply not renew the fixed term contracts of those employees with less than two years’ service, or whether they needed to be included in the redundancy exercise so as to not give rise to claims for less favourable treatment from the fixed term employees.

Redundancy in tranches

We managed the redundancy process including drafting settlement agreements for a software company which took place in a number of small tranches over the course of a two-year period. Care had to be taken to ensure that disruption to business was minimal and that employees were motivated to continue to work. It was important that the selection criteria evolved as the business transitioned during the two years. We made sure that it reflected the changing workforce following each wave of redundancies.