Redundancy – not a magic wand to fire someone
When’s a redundancy not a redundancy? When it’s an obvious attempt to just sack someone.
A real redundancy is when a company decides it no longer needs a particular role. Maybe because the work is no longer needed, or the company needs to downsize to reduce its staffing costs, or it’s part of a restructuring or the business is being closed down.
That’s just about removing the role from a company. The next step is what happens to the person in that role. Has the firm really considered moving them to another position, before ending their employment?
As well as working with companies, Quick HR frequently works with people who are losing their jobs and being made redundant. Regularly, it’s obvious almost immediately that the firms involved are just trying to use a short redundancy process to fire someone and there’s no real redundancy involved.
Here are 3 key areas you need to cover for a real redundancy:
1 A business reason: why is the job going? For example, the work is no longer needed (maybe it’s being outsourced or that kind of work is just stopping) or the company needs to save money and downsize.
2 Consultation: start with a proposal, discuss it with the employee or employees involved and finally make a decision. For a start, firms can sometimes uncover issues that change the situation and then drop the redundancy plans. Starting on the basis that it’s going to happen anyway or just telling someone that he or she is redundant doesn’t inspire confidence that it’s a genuine redundancy and might backfire. It doesn’t have to be a long process – it just has to be a real one.
3 Other jobs: if the role is redundant, what happens to the employee? Avoid looking like the decision is targeting an individual who could be transferred to another job when his or her job is removed. One recent example was a Sales person made redundant out of a team of 12 people. No attempts were made to consider whether that employee should be moved to a different job and one of the others should be made redundant instead. It’s called “pooling” – you consider everyone in relevant jobs, assess them and usually the person with the lowest scores will be the unlucky choice.
People who have experienced redundancy know that it’s a stressful experience: the feeling of rejection when they thought they were appreciated for their work as well as worries about what happens if they lose their jobs. Any suspicions that firms are just trying to sack them makes the situation so much worse.
Although these are confidential issues, news inevitably spreads around your employees (by the people involved) and redundancies cause all kinds of negative reactions. Prepare for that too before you start, including communications about any other changes and job security. The worst thing to do is to make someone redundant, then move on to a similar process after a short period of time – you’ll make everyone anxious about the risks of their employment.
If the employee has been with the company for 2 years, they’re entitled to a redundancy payment and you can quickly calculate the amounts here. That’s the legal minimum – firms can offer to pay more or pay something if it involves an employee who’s not been employed for 2 years.
It’s always worth considering these issues carefully before starting any redundancy process. If it doesn’t feel genuine and fair (people’s perceptions are essential during this), then there’s a risk of an unfair dismissal or discrimination claim. There are ways to reduce this, including Settlement Agreements (otherwise called compromise or severance agreements), but handling a redundancy correctly should mean that firms don’t need these.
For more advice, see the Acas page here – or contact Quick HR, of course.
