Preparing for Redundancy? Here are Our Top 20 Tips to Get You Started.
The Government has extended the Coronavirus Job Retention Scheme until 31st October 2020 and outlined how the Scheme will continue to support those employers and employees where no work is available and now where some work is available, through the Flexible Furlough Scheme.
The intention is to keep as many employees as possible in employment with the expectation that the economy will pick up and therefore avoid the need for redundancies.
Unfortunately it is inevitable, however, that despite these efforts, some businesses will be forced to reduce their workforce and make redundancies. We are here to support you should you need to make redundancies in your business and we’ve prepared our top twenty tips for handling redundancies well.
Top Tip #1
Planning and preparation is key. Take the time to plan the redundancy process carefully. Early planning can avoid unnecessary challenge from employees, can give you time to consider alternatives and lead to a smoother, more effective process.
Top Tip #2
Plan and budget for the costs of redundancy – both notice, statutory redundancy and any contractual redundancy entitlements.
Top Tip #3
Think about how you can avoid some redundancies; there are a range of ways you could immediately reduce the need, including introducing a freeze on recruitment, reducing overtime, reducing the use of temporary workers, re-training employees into other areas (redeployment), reducing sub-contracting, make use of temporary lay-offs or short-time working and changing terms and conditions such as a wage freeze, wage cut, reduction in bonus or pension contributions.
Top Tip #4
Consider whether you would accept voluntary redundancy requests. Even if you offer voluntary redundancy, you don’t have to agree to all the applications.
Top Tip #5
Consider how many people will be affected. If it’s more than 19, you will be required to must submit an HR1 Form to the Department of Business Innovation and Skills.
Top Tip #6
Remember that you must also engage in collective consultation if more than 19 employees are affected within a 90 day period. It is good practice to extend communication and engage in collective consultation even if you’re not looking at 20 or more.
Top Tip #7
Don’t forget that there are statutory duties to collectively consult and inform appropriate representatives of affected employees. You can’t avoid it and there is a detailed process that must be followed to ensure you comply with the requirements.
Top Tip #8
Remember that there are prescribed consultation timescales that must be adhered to when making more than 20 employees redundant within a 90 day period. They are 30 days for 20 – 99 employees and 45 days for 100 or more employees.
Top Tip #9
Engage in meaningful consultation; be open to suggestions, ideas and proposals. Consult both on the method of selection and, if necessary, the unit of selection. It your employees have agreed to the process that will be applied it will be harder for them to be critical of it later.
Top Tip #10
Always build sufficient time for individual consultation into your project timescales. If you’re not required to collectively consult, you may need to allow more time for detailed individual consultation. Plan to have at least two meetings with each individual before making redundancy decisions. It’s important that you’re not seen to rush the process.
Top Tip #11
Remember individuals have a right to be accompanied at all stages of redundancy consultation.
Top Tip #12
Prepare well and plan both the method and unit to be used for selection as well as the selection process.
Top Tip #13
Always offer a right of appeal to anyone who is selected for redundancy. Understand why the appeal has been received, why the individual disagrees with it and take the opportunity to rectify anything that hasn’t been done correctly.
Top Tip #14
Avoid any discriminatory practice – any selection criteria must be objectively justified.
Top Tip #15
Consider whether there are alternative roles that a redundant employee could fulfil. Don’t assume someone wouldn't be interested in alternatives that are available, even if they are lower paid, lower status roles.
Top Tip #16
Remember that trial periods in alternative roles should last a minimum of 4 weeks (longer if necessary) and agreed in writing. If the trial is unsuccessful the employee will be entitled to a redundancy payment.
Top Tip #17
Bring the employment contract to an end through the proper use of notice or payment in lieu of notice – you can use the furlough grant for notice (we recommend you top up to 100% but it is untested at tribunal).
Top Tip #18
Avoid the additional cost of paying for unused holiday you can require employees to take accrued holiday during their notice period subject to giving the right amount of notice. This includes time on furlough.
Top Tip #19
Remember redundancy payments up to £30,000 are tax free.
Top Tip #20
And finally, always remember, the way you treat your employees during these tough times will be remembered by those still in the business and those around you.
Remember – contact us for support with redundancy. Our team at Danton have a full understanding of what is required and we’re on hand to support you and work through these challenges with you. Call us today on 01527 306 760 or email us at info@dantonhr.com.