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.
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:
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.