It is an unfortunate fact that many organisations are facing the problem of having to lay off staff due to the continuing recession. Companies are affected across the world but in the UK there is redundancy legislation to help prevent employees being unfairly dismissed. Redundancy is one of the fair reasons for dismissal under S98 of the Employment Rights Act 1996 and there is a definition of redundancy contained within that section.
This is not meant to be too legalistic but, in essence, an employer can say that an employee is dismissed due to redundancy if the dismissal is wholly or mainly attributable to the fact that –
The employer has ceased, or intends to cease;
- To carry on the business for the purposes of which the employee was employed or
- To carry on that business in the place where they were employed
- The requirement of that business for employees to carry out work of a particular kind either at all or at the place where the employee works has or is expected to cease or diminish.
- There are a number of steps that employers should follow both legally and in terms of good practice and these are quite well established but employers so often get these wrong and find themselves being sued for unfair dismissal which can be extremely costly at a time when finances by definition, are not plentiful.
- Firstly; employers should give as much warning as possible about the possibility that there may have to be redundancies. This should be communicated to affected employees and/or their representatives (trade union, staff association etc) should there be any.
- There should be meaningful consultation about the “pool of people to be considered” and the criteria used to help decide on the redundancies. It is far better if this done at a time when no redundancies are envisaged as it takes all the emotion out of the process.
- The criteria should be capable of objective assessment. So for example, the number of year’s service is an objective and measurable criteria; how good they are at their job is much more subjective and difficult to evidence.
- The selection should be carried out in accordance with that criteria and those staff affected should be able to both discuss it and challenge it. This means that proper meetings should be held with each individual affected with them being given all the rights normally associated with any dismissal process.
- Proper notification should be given in writing and employees should be given full rights of appeal.
This is a very brief run through, but the point to stress is that communication is vital throughout the process as it is a stressful time for all concerned and one of the main things that causes problems is when it is handled badly or insensitively. Low morale can quickly take hold across the whole organisation and can hit both those affected and those that are not even in the equation.
It’s a situation that no-one likes to be involved in, but if it is dealt with properly, can greatly alter the way in which it is viewed and help alleviate possible problems later on.
Steve Ferns has held senior management and board level posts in both UK listed companies and local government over the past 20 years specialising in turnaround situations and business regeneration. He has extensive experience in people management and advises companies and individuals on UK employment practices and HR. He is a lay member of the Employment Tribunals has lectured in business studies and been chair of governors at a local school.