Many business’ have encountered financial struggles throughout 2020 due to the impact of coronavirus and unfortunately we will likely see similar impacts over at least the first quarter of 2021. We have seen a significant increase in employers seeking advice on the redundancy process, together with an increase in employees seeking advice on the terms and effect of settlement agreements and unfortunately, we do not anticipate that this will ease over the coming months.
It is important that employers are aware of the steps which should be taken and considered where there is a potential redundancy situation to avoid any potential claims. Suzzanne Gardener looks at 5 top tips for employers to consider: –
1. Is there a genuine redundancy situation?
A genuine redundancy situation arises where; the employer has ceased or intends to cease carrying on the business that the employee was employed for, or where the business is no longer carried on from the place where the employee is employed. Redundancy may also arise where the requirements of the employer change in relation to the work which is being carried out, or where the demand for that work has, or is expected to cease or diminish (Section 139(1) Employment Rights Act 1996). Where there are financial difficulties often there will be a genuine redundancy situation.
2. Consider alternatives
Are there any alternatives to redundancy? It may be possible to make internal changes such as reducing or ceasing overtime or the use of agency workers. In addition, the employer may invite employees to apply for suitable alternative vacancies or invite voluntary redundancy or early retirement.
3. Make sure your selection criteria is right and fair
There are no fixed rules about a selection pool however a written record should be kept of the rationale behind the pool selection. Employers will also need to create a selection criteria for employees. This may include; length of service, attendance records, disciplinary records and performance. Employers must ensure that the pool selection and the criteria are not discriminatory.
4. Communicate with employees
This is key. Employees should be informed as soon as possible if there is a risk of redundancy and should be consulted once the selection process has taken place. Depending on the number of employees, a collective consultation may be required. Employees should be given the opportunity to comment on their potential redundancy, be advised of the selection criteria used and offered suitable alternative employment if available. A meeting should be arranged to confirm the outcome of the redundancy and it is good practice to allow the employee to be accompanied. A written record of all meetings should be kept.
5. Keep Employees Motivated
Finally, employers should not forget about those employees who are not being made redundant. It is good practice to take the time to re-assure those remaining in employment and to motivate them, especially where there are changes in the company.
At O’Donnell Solicitors we can advise both employers and employees on redundancy situations and Settlement Agreements. For further advice, contact Richard Dobson Mason on firstname.lastname@example.org or on 01457 761 320.