Redundancies are an unwanted necessity at the moment. The Chartered Institute of Personnel and Development (CIPD) and management consultancy KPMG believe a quarter of UK businesses will soon be implementing plans to make redundancies, if they have not already.

The Forum of Private Business (FPB) says 12% of its calls regarding legal advice relate to redundancy laws and employment issues of redundancy.

Businesses that don’t follow the redundancy laws may risk expensive unfair dismissal cases.

The compulsory dispute resolution regulations generally apply to all dismissals, including redundancies, except in the case of collective redundancies. If your making employees redundant does not at least follow a three step plan, you could find yourself facing unfair dismissal claims whereby an employee can seek compensation can be increased by 50%.

Three Steps

Briefly, a compulsory dismissal procedure requires three steps:

1) Written grounds for the proposal of that employees redundancy inviting them to a meeting to discuss the situation before a formal decision is make.

2) Meeting

3) Appeal

In Depth Information

Once you propose redundancy you must have in-depth discussions must take place and be well documented. There should be at least two meetings regarding the redundancy and the meetings should look into the possibility of alternative employment if the redundancy is going to be deemed fair.

When meeting with the employee, that employee is within their rights to have either another employee or a trade union official with them. These people don’t have the right to answer questions asked to the employee, but can otherwise take an active role in the meeting.

An employer must also show they have acted reasonably in all the circumstances, including the size of the business and administrative resources. To show this, you must have fair and objective criteria for dismissal and a consistent approach. A paper trail to prove this is usually key if further action is taken by the employee.

When you select a potential employee to be made redundant, subject to consultation, and after you have put together the list of criteria and applied it to all your staff that were at risk of redundancy, you must then disclose information to your employee to explain your selection. There is debate as to how this should be done.

One way is to firstly enclose the details of the individuals scores in the objective test used to select them with the letter of notification, as well as enclosing an anonymous schedule of other pool employees’ total scores.

This may seem overly cautious, but should provide you with protection against Tribunals, and has the benefit of allowing any scoring mistakes to be picked up before a possible Tribunal.

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