Redundancy: a word that we hear all too often these days. Why does it happen and how can we make it an easier process to go through for employees and employers alike? Sharn Rayner steps you through the process.
There can be a number of reasons a business considers making an employee's position redundant. This could include a downturn in business or the end of a major customer contract which means there is just not enough work available for the number of employees, or there may be a major change to the way the business operates due to either external or internal forces: for example, new market demands, a change in supplier, new ownership, or a restructure to bring about greater efficiencies and productivity and/or reduce costs.
Where it is necessary for an organisation to consider making positions redundant it is important that a fair and correct procedure is followed, not only to comply with employment law requirements but also for the benefit of the organisation and its employees, both those staying and any that unfortunately may need to leave. The reasons for redundancies must be genuine business reasons - those outlined above are good examples. Making an employee’s position redundant simply to exit them from the organisation due to reasons of poor performance, inability to get on with other staff or personal dislike are not genuine reasons for making an employee’s position redundant and such courses of action can give grounds for a personal grievance.
To avoid this happening, a recommended process to follow is set out below – this is an abbreviated overview and should you need to consider making redundancies, please consult a professional advisor for up to date, clear direction.
Develop and communicate the proposal
As soon as it seems redundancies are likely you need to communicate this to your staff. Write a proposal and put it in a consultation document or letter to affected employees. If many employees are affected you may be best to call a meeting to go through the proposal in more detail and give employees the opportunity to ask some initial general questions. The consultation document should cover the following:
- Introduction and need for redundancies
- The proposal
- Selection/criterion of roles for redundancy
- How the consultation process will work including timeframes
- Recruitment into new roles
- Employee assistance
- Further help
First stage of consultation
After employees have been presented with the proposal they need a reasonable opportunity to provide feedback and comment. Feedback can either be given in person or in writing, and it is good practice to give both options. If the feedback is to be in person call a meeting with affected employees individually to receive that feedback.
One or more employees may ask questions about the redundancy proposal. You may or may not have an obligation to reply depending upon the nature of the information requested. If in doubt, get legal advice.
The purpose of the first feedback meeting is to listen to the feedback provided by the affected employee and to answer any questions they may have after seeing the initial consultation document. Questions often centre on entitlements to redundancy compensation, redeployment options or new roles created by the process.
Consider all the feedback with an open mind. If you decide to alter the original proposal in response to feedback and the alteration has a different affect on one or more employees you have an obligation to go back and consult with these employees about the changed proposal. Update the consultation document to provide the results of the feedback and ask for further feedback. If the proposal remains unaltered, confirm the proposal.
Confirm the proposal
Communicate the feedback you have received and the decision to confirm the proposal.
Application of selection criteria
Where you need to choose people for redundancy, you need to apply the selection criteria in the proposal (upon which you have already sought feedback). Invite each employee in the redundancy pool to come to an ‘interview’ in order to demonstrate why they should be selected to remain. Each employee should be interviewed separately. If there is no selection process, skip this step and move to the next step.
Communicate to affected employees
Once you have made your selection, communicate this to those who were interviewed. This can be done in writing with a follow up meeting as per the next two steps.
Meeting to discuss other options
The law requires that you consider other options to redundancy where they are available. Therefore, have a meeting with all affected employees to discuss whether there are any alternative roles available and the process for selecting into those roles. When termination of employment will occur, explain how you will help the employee find other work (for example, time off for interviews, providing a reference etc), when the last day of work will be, obligations until then, whether you will pay notice in lieu etc.
Following the meeting you must give notice of termination to formally end the employment. The letter can summarise anything discussed in the meeting.
Any redundancy process is very stressful for all those involved but steps can be taken to minimise this, this includes providing outplacement support.
Outplacement support helps businesses manage the redundancy process as smoothly as possible. Employees offered outplacement support are less likely to hold negative feelings about their employer. Research also indicates that employees who receive outplacement support find employment quicker and more easily than those who don’t. Examples of outplacement support include personal assessment, coaching in job research, CV preparation, applying for jobs, interview preparation, action planning and goal setting, and referral and selection of recruitment consultants.
Some of the benefits of providing outplacement support include:
- Helps the employee to be positive and attain a new rewarding position
- Demonstrates your commitment to your employees – those in roles that are being made redundant and those remaining
- Enhances your image and reputation to customers, remaining employees and the local community who will see that you are endeavouring to assist employees leaving the business
- Promotes better retention and productivity from remaining employees
- Reduces stress on those involved in the process of making positions redundant
While much of the focus is put on employees directly affected by the redundancy process and those leaving the organisation, it needs to be recognised that the process also puts considerable stress on those carrying out the process and other staff not directly affected. Consideration must be given to ensure that these people are also kept informed of what is happening and that any necessary support is provided. No-one wishes to see a co-worker having to leave for these reasons nor a manger having to let staff go under these circumstances. Unfortunately redundancy arises in many businesses but there are things that can be put in place to lessen the impact and done in such a way that treats affected employees with fairness, dignity and respect.