Considering a Restructure - Key Steps in a Redundancy Process
- Date: Monday 23rd July 2018
- PDF: Download
A frequent question asked by our clients is what rights does an employee have when an organisation needs to implement a restructure or reduce headcount that will result in redundancies?
If an organisation needs to carry out redundancies for between 20 and 99 employees over a period of 90 days or less then consultation should start at least 30 days before the first dismissal takes effect.
Organisations looking to make 100 or more employees redundant must begin consultations at least 45 days before the first dismissal.
There are no set rules to follow if you are making fewer than 20 redundancies. But it is good practice to fully consult with your employees (and their representatives), as an employment tribunal could decide that you have dismissed your staff unfairly otherwise.
At the early stage of a restructure, it is worth exploring if there are any employees who would take voluntary redundancy. The advantage of this is that it may have a less demoralising impact on the workforce, as the affected employees have some degree of control over their dismissal.
The disadvantages of voluntary redundancies are that it can be more expensive than compulsory redundancies, as it is often the longest serving employees who volunteer, leading to potentially higher redundancy payments and the loss of valuable experience. It is therefore important to be clear from the outset that the company reserves the right to decide whether to accept an employee’s application for voluntary redundancy.
The company may receive enough volunteers to either avoid the requirement to make any compulsory redundancies or to at least reduce the number of compulsory redundancies.
If too few employees volunteer, the process will be prolonged as the business will need to go through both the voluntary and the compulsory stages.
If the company has insufficient, unsuitable, or no volunteers, it will have to resort to making compulsory redundancies which is achieved through a competitive selection process.
Consideration must also be given to any other vacancies that might exist within the business, into which employees ‘at risk’ of redundancy could be redeployed. Be careful at this stage to not make assumptions about the skills and experience people might have for alternative roles.
In instances where a business has alternative jobs to offer to redundant employees, an employee on maternity leave, who has been selected for redundancy, must be offered a suitable vacancy before any other employee.
When the redundancies are made, the company can help those who have left employment by offering outplacement support such as help with writing CV’s, applying for jobs and preparing for interviews.
Overall, when a business is forced to restructure and carry out redundancies the correct legal procedures must be followed. This will ensure the company can protect itself from unfair dismissal claims and also demonstrate that everyone involved in the process has been treated fairly and each employee's rights have been met.