Malcolm and Co. Solicitors- Employment

Businesses regularly evolve and shift focus and on occasion it becomes necessary to move premises and/or lose staff.

Redundancy occurs where:

• It becomes necessary to cease business in the area in which the employee was employed (Job Redundancy); or

• It becomes necessary to cease to carry on that business in the place where the employee was employed to work (Workplace Redundancy); or

• The requirements of the business are such that you no longer require as many employees to carry out work of a particular kind i.e. you have a surplus of employees carrying out the same work (Employee Redundancy).

In most circumstances, you must undertake a period of warning, information giving and consultation with any employees who may be affected by the redundancy. If you fail to consult at all or insufficiently, you open yourself up to a Protective Award from the tribunal (up to 90 days pay for each disgruntled employee).

If you are in a “surplus employee” type situation, you must apply appropriate and fair objective selection criteria to choose which of those employees should be made redundant. With Age Discrimination now unlawful, it is not now enough to apply a “Last In First Out (“LIFO”)” approach as this could be indirectly age discriminatory. Employers need to use a skills based matrix to objectively select employees to go.

In all circumstances, you must consider any “redundant” employees for suitable alternative employment within your company. What is “suitable”? What happens if the employee refuses to accept such position? Are you entitled to withhold any redundancy payment due to them? Do you know that employees are entitled to try the new position for a trial period?

If an employee is currently pregnant or on maternity leave, the issues become immediately more complex and you may be liable for Sex Discrimination in addition to potential automatically Unfair Dismissal claims, if you make a redundancy.

Depending on how many employees you are considering to make redundant, there may be a set period of time over which consultation must take place.

If you are making 20 or more employees redundant, you must notify the Secretary of State.

The process can appear daunting, but if approached properly and ahead of time to allow consultation to take place, redundancy can be a fair reason to dismiss employees. Let Malcolm & Co. Solicitors guide you through the steps that you need to take; draft letters for you; calculate redundancy entitlements for staff and ensure that you select employees to go fairly and objectively to limit the possibility of further claims.