Redundancy law specialist advice for employers

If the correct redundancy process is followed, an employer can dismiss an employee by reason of a redundancy or restructuring and significantly reduce the risk of employment law claims.

If, as employer, you fail to follow the correct redundancy process, you risk an unfair dismissal or discrimination claim, as well as potential compensation payments. Even worse for employers is being dragged through the Employment Tribunal, which can be costly, time-consuming and damaging to the business' reputation.

Our employment lawyers advise employers on managing staff redundancies and the legal requirements involved. We also deal with difficult situations redundancy appeals and allegations of unfair selection for redundancy. Please do get in touch.

Making employees redundant

We are specialist employment lawyers and have dealt with many redundancy situations for employers. This translates to cost savings for you, as our experience allows us to quickly identify the issues and determine how best to proceed.

• We cover all the areas you will need. We help you to document and justify your decisions and follow an appropriate process, helping to reduce the risk of an employment law claim.

Fair reasons for redundancy

A “fair reason” for dismissing an employee by reason of redundancy, is a reason that is wholly or mainly attributable to the business. Examples include:

• Ceasing to trade;
• Relocating the business; or
• Having a reduced requirement for employees to carry out particular work.

How to prepare to make staff redundant?

The key is:

• appropriate consultation with employees; and
• considering whether there are any suitable alternatives to redundancy.

Before making staff redundant, it's important to prepare carefully, and we recommend the following for employers:

• Clear written redundancy procedures - these often form part of an employment or staff handbook. Keeping the procedure in the handbook, rather than making it contractual, can make it easier for an employer to update the process when required.
• Ensure you create a pool of employees potentially at risk - where appropriate, identifying an appropriate selection pool is an important part of a fair redundancy process.
• Give employees notice of potential redundancy - ensure employees are given sufficient warning of potential redundancies and understand the reasons for the proposed changes.
• Consult with employees at risk - listen to their views and suggestions, and keep a record of the consultation process.
• Selection criteria - make these objective and carefully considered, be consistent and document everything.
• Alternatives to redundancy - ensure you look at all possibilities and document your process.
• Redundancy employee right to appeal - ensure you communicate the right to appeal and follow the process involved.

Making 20 or more employees redundant

Employers who propose to make 20 or more employees redundant at one establishment within a 90-day period are obliged to consult collectively with employees. A failure to follow these requirements can lead to a protective award of up to 90 days' gross pay per affected employee.

See also our more detailed guide to making a large number of staff redundant.

Redundancy payments 

Employees who are dismissed by reason of redundancy may be entitled to a statutory redundancy payment. The government sets statutory redundancy pay limits, which are updated periodically, and the amount payable depends upon the number of years of service and the employee's age.

 Additionally, there may be an express or implied contractual right to an enhanced redundancy payment.

Redundancy notice

There are important process requirements when considering staff redundancies. The correct notice of potential redundancies, usually in the form of a letter to employees, is very important both in terms of process and form. The way the redundancy process is communicated to employees can also be important in reducing the risk of misunderstandings and disputes.

Please get in touch.