There may be times when a business needs to make the difficult decision to reduce the workforce, or to even shut down the business completely.
This could be for multiple reasons, but following a proper redundancy process is crucial for employers to reduce the risk of successful claims in the Employment Tribunal (ET).
The Employment Rights Act defines the following situations as a redundancy dismissal:
- the closure of a business completely
- the closure of a workplace
- having a reduced requirement for employees to carry out work of a particular kind.
Even if an employer thinks it has a good business reason for dismissing employees because of redundancy, employees who have the qualifying service may still be able to bring a claim for unfair dismissal if a fair and proper process is not followed.
It is important that employers take careful consideration as to the process that is followed and always bear in mind ACAS guidance.
Some of the steps that should be taken before making an employee redundant include
- identifying the pool of employees who are at risk of redundancy
- conducting a fair and proper consultation process
- using a selection criteria and applying this fairly
- considering suitable alternative employment that may be available to avoid making redundancies
- dismissing employees and outlining the final payments they will receive.
In a redundancy dismissal, employees will be entitled to their contractual payments (such as notice pay and accrued but untaken holiday pay) as well as a statutory redundancy payment.
A failure to pay employees correctly could result in claims in the ET so it is really important that employers get this right.
We can assist employers throughout the whole process and provide advice on the payments that are required.
Contact our HR Consultants today
For more information on redundancy and business organisation, please do not hesitate to contact our specialist team by filling out our online enquiry form or by calling 0333 222 0989.