Redundancy Planning- Practical Strategies for Employers

In the face of economic pressures and uncertainty, an increasing number of NI businesses are confronted with the difficult decision of implementing large-scale redundancies. Employers have a duty to follow a fair redundancy process which meets employees’ rights while protecting the organisation from risks such as tribunal claims and reputational damage. This article outlines key practical considerations for employers planning for redundancies, ways to address the potential negative impacts of the process and discusses how leaders can best navigate this challenging period of change.

Consider if the redundancy is necessary.

Employers should create a business case which documents why redundancies are necessary. As part of this business case, it is important to demonstrate what alternative options to redundancy have been considered. Some potential alternatives that employers could explore include short time working and temporary layoffs (if provided for within the contract of employment), agreed changes to working hours or consideration of voluntary redundancies to avoid a compulsory redundancy process.

Carry out a fair and non-discriminatory selection process.

At the initial planning stage, employers need to carefully assess and identify the correct ‘pool’ of employees who will be placed at risk of redundancy. The pool should comprise all of employees carrying out the same or similar work as each other – employees must not be placed in a pool simply because they are underperforming. The scoring criteria must be based on objective measures such as skills/experience, qualifications, performance, disciplinary and attendance records. Employers should take particular care to ensure that the selection criteria is not directly or indirectly discriminatory. For example, disability related absences should be discounted if attendance records are a selection criterion. At risk employees should have an opportunity to comment on the scoring criteria as part of the consultation process.

Conduct meaningful consultation.

Employers are required to consult with all at risk employees individually to explain why there is a need to implement redundancies and the process which will be followed. Consultation meetings provide an opportunity for employees to ask questions, raise concerns and put forward alternative proposals as a means to avoid redundancies. Employers have a duty to seriously consider and respond to any counterproposals that are raised during the consultation process. Effective communication at these meetings is essential to ensure fair and meaningful consultation occurs. If 20 or more employees are made redundant at one establishment within a 90-day period, collective consultation obligations will also be triggered.

Ensure that statutory processes are followed.

Employers in NI have a duty to follow the three-step statutory dismissal procedure which involves offering the employee the right to appeal against their dismissal on the grounds of redundancy. Employees with over 2 years’ continuous service are entitled to statutory redundancy pay. This is calculated according to an employee’s length of service, age and weekly pay (subject to statutory caps). In addition, employees are entitled to holiday pay accrued up to the termination date and statutory or contractual notice (whichever is greater).

Take proactive steps to manage employee morale and offer support.

Employers should approach the redundancy process with empathy and treat everyone impacted with dignity and respect. Redundancies can have a critical impact on the morale and wellbeing of employees who are subject to the process (whether they ultimately leave the business or not) and other employees in the business who are not directly impacted. Employers should signpost employees to available support such as Employee Assistance Programmes and consider providing outplacement support. It’s important to ensure internal communications to all stakeholders are managed effectively throughout the process to maintain workforce morale and avoid misinformation circulating.

How can we help?  

Redundancies can be a stressful and traumatic experience for those involved and the benefits of early and diligent planning cannot be overstated. Employers who fail to carry out a redundancy procedure fairly are liable to unfair dismissal and/or discrimination claims. However, even the most meticulously planned redundancy processes can encounter unforeseen challenges and complexities, presenting a daunting landscape for employers. As specialists in employment law, our consultants can help you to navigate the redundancy process smoothly, from initial planning right through to the implementation stages. We can also offer bespoke advice on all aspects of workforce planning. For more information, or for help with redundancy planning please do not hesitate to get in contact with one of our specialist team.