Redundancy: a few basic reminders

With more companies feeling the squeeze in the current economic downturn, it's a useful time to remind those contemplating redundancies of just a few basics.

There are a number of steps which are all too easily overlooked in the stressful period of redundancy implementation.  Often, it is as important to be seen to be addressing them as it is actually to address them.  To avoid some very common errors, do please note:

 

•         You need to consider a sufficiently wide "redundancy pool".  You may think it is clear where jobs are to be lost but, when examining the current and future states of your organisation, the chances are that you ought to be considering (or putting "at risk") a wider pool of employees than simply those occupying the positions to go

 

•         In then selecting the employees to be made redundant, you will need to apply clear, objective and appropriate criteria

 

•         You may have previous experience and knowledge of individual redundancy consultation requirements, but remember that the (still relatively new) statutory minimum dismissal procedures apply to redundancy dismissals as they do to other dismissals.  You will need to combine the requirements of each regime, which is invariably more awkward than at first appears to be the case.

 

•         The situation is different where you propose dismissing 20 or more employees by reason of redundancy.  Here, the statutory minimum dismissal procedures do not apply, but that is only because you are then subject to specific collective redundancy consultation obligations instead.

 

On a slightly different footing, you should also bear in mind:

 

•         There is often the temptation to circumvent procedural requirements by initiating "without prejudice" negotiation to strike a quick and sensible settlement (which might well suit both you and the employee, of course.)  However, be cautious here:  "without prejudice" privilege does not invariably apply.  If such communications were to be admissible in evidence, they may well, for example, demonstrate a predetermined decision to dismiss, undermine any defence of an unfair dismissal claim and expose you to an increased tribunal award.  This topic is explored in slightly greater detail here.

 

•         Notice of termination is required for redundancy dismissals as it is for other dismissals.  It is surprising how often this is not anticipated.  (You may want to check what pay in lieu of notice options you have, of course, and you may have particular notice requirements in a redundancy policy, but the principle stands.)

 

•         In calculating statutory redundancy pay, don't forget to check the latest cap on a "week's pay".  This changes from time to time (in recent years, annually on 1 February).  Currently the cap is £330.     

 

The reminders set out above are not comprehensive, of course, and do not constitute any form of checklist.  One further, very obvious qualification, is that your organisation may have its own redundancy or job security policies, which you may need to dovetail with the points raised here.

 

For further information, please contact Rory O'Connor.