Retail and restaurant closures continue to sweep across UK high streets. With more and more businesses facing closures, what obligations should employers’ meet when handling redundancies?

 

For a redundancy to be genuine employers must demonstrate that the employee’s job will no longer exist. This could be because the business is:

  • changing what it does
  • doing things in a different way, for example using new machinery
  • changing location or closing down

Although ‘redundancy’ is a fair reason for dismissal, it is important to follow a proper procedure to minimise the risk of a redundancy dismissal being found unfair. A fair process could also reduce the risk of a discrimination claim.

 

What does not constitute redundancy?

An employee cannot be regarded as redundant if their dismissal is mainly attributable to:

  • Transferring night workers to day workers
  • Changes to a shift system to promote efficient working
  • Reduction of overtime

 

What are employers’ obligations?

Consultation and information
Employers should ensure that consultation takes place in good time and that employees (and recognised trade unions) are given as much notice as. Where 20 or more redundancy dismissals are likely to take place the statutory consultation obligations must be followed. Collective consultation will apply where:

  • 20 to 99 employees are affected by the proposed changes, 30 days consultation must take place
  • 100 or more employees are affected by the proposed changes, 45 days consultation
    must take place.

Consider alternatives to redundancy
One of the most significant things an employer can do to minimise the unfairness for a redundant employee, is to determine if there are any vacancies that would be suitable for the employee.

An employer should consider whether voluntary redundancies would be appropriate before commencing a compulsory redundancy selection. Where a selection process is required, unbiased selection criteria should be drawn up, explained and used fairly. The employer should also allow a period of time for appeal against selection for redundancy.

Qualification for a redundancy payment
An employee who is continuously employed for two years or more is entitled to a statutory redundancy payment. The amount is based on weekly gross pay, age and length of service. It is subject to a cap of £508 a week and 20 years’ service.

The government has provided a tool for the calculation of redundancy payments: Calculate statutory redundancy pay.

Throughout the whole redundancy process, employers need to remember that communication is the key.

If you would like advice and hands-on support on managing redundancies please contact one of our team on 01494 817193 or drop us an email: info@eliaction.com We can guide you through the complete process.