Redundancy can be a minefield for both the employer and employee. You need to handle redundancies fairly and objectively and treat employees with respect and the process has to be legally compliant. In this blog we will cover the key aspects of redundancy including redundancy pay, notice periods, suitable alternative employment and more.
What is Employee Redundancy?
Redundancy is when an employee’s job is no longer required, often due to business changes such as restructuring, cost savings or changes to hours or operations. When making redundancies employers must consult with their employees, explain the situation and look for suitable alternative employment to soften the blow.
The Redundancy Process
The redundancy process must be fair. Employers must consult with employees who are at risk of redundancy. This consultation process ensures redundancies are made fairly and objectively and gives employees time to prepare for the changes. Collective consultation is required when 20 or more employees are being made redundant at one establishment and the employer must notify the government in these situations.
During the consultation employers should look at other options like voluntary redundancy or suitable alternative employment within the organisation. If suitable alternative employment is offered the employee may be required to do a trial period in the new role.
Redundancy Pay and Entitlements
Employees who are made redundant may be entitled to redundancy payments depending on their length of service. The redundancy payment is calculated on age, length of service, working hours, and weekly pay. Employers must provide redundancy pay for employees who have been in continuous service for at least 2 years.
In addition to redundancy pay employees are also entitled to their notice period or notice pay. This gives them time to prepare for their next steps whether that be finding a new job or exploring other options. The notice period may vary depending on the employee’s length of service and employers must provide the required notice according to the terms.
Voluntary Redundancy What is it?
Voluntary redundancy is when an employee agrees to be made redundant in exchange for a redundancy package. This can be a good option for both employees and employers as it may reduce the need for forced redundancies. Employees who opt for voluntary redundancy will still be entitled to redundancy pay and other benefits depending on the terms agreed with the employer.
Fair Selection and Risk of Unfair Dismissal
Employers must ensure the redundancy selection process is fair and objective, taking into account factors such as skills, experience, and performance, without discriminating on the basis of age, gender, or other protected characteristics. GEP Legal provides expert advice to employees of all levels regarding redundancy proceedings. Their redundancy solicitors can help ensure that employees are treated fairly during the selection process, and, if selected for redundancy, that they receive the full redundancy pay to which they are entitled.
Not following proper redundancy procedures can expose employers to unfair dismissal claims. To avoid this risk, it is critical for employers to seek professional advice and follow correct procedures, including providing adequate notice, offering suitable alternative employment, and conducting thorough consultations. GAP Legal can assist employees in navigating these processes, ensuring their rights are protected
Notice Periods and Shared Parental Leave
Employees who are made redundant while on shared parental leave are entitled to the same redundancy rights as any other employee. This includes the right to a consultation, redundancy pay and a fair redundancy process. If an employee is on parental leave and their role becomes redundant they should still get notice, redundancy pay and be considered for suitable alternative employment.
Redundancy for Employers and Employees
Redundancy can be an emotional and financial blow for employees especially if they have been with the company for a long time. Employers need to handle redundancies with sensitivity and give employees the support they need whether through outplacement services, reasonable notice periods or redundancy packages.
For employers making redundancies can be a way to cut costs and restructure the business. But it can also impact the morale and productivity of the remaining workforce. Employers should consider the wider impact on the organisation when planning redundancies and support those facing redundancy and the employees who remain.
Practical Tips for Employers
Employers who need to make redundancies should follow a structured and transparent process. This means:
- Consultation: Employers must consult with employees and explain the situation fully and explore all reasonable options.
- Fair Selection: The selection process must be fair and objective and not risk unfair dismissal.
- Suitable Alternative Employment: Offering other roles within the organisation can be a way to avoid redundancy.
- Redundancy Pay: Employers must get redundancy pay correct and employees must know their entitlements.
- Notice Periods: Employers must give the correct notice period depending on the employee’s length of service.
Conclusion
Redundancy is a tough experience for both employee and employer. But by following the redundancy process, giving fair redundancy pay and offering suitable alternative employment when available employers can mitigate the damage. Employees facing redundancy should know their rights and entitlements such as redundancy pay and notice periods and take advantage of the support services available to them as they look for a new job.
So whether you’re an employer or an employee, know the process. Know your rights. Know your options.