Redundancy law specialist advice for employers

If correct process is followed, an employer can dismiss an employee by reason of a redundancy or restructuring and avoid paying out on employment law claims.

If, as employer, you fail to follow the correct redundancy process you risk an unfair dismissal or discrimination claim plus paying out compensation.  Even worse for employers is being dragged through the Employment Tribunal, risking adverse publicity.

Our employment lawyers advise on and manage staff redundancies.  We also deal with difficult situations, redundancy appeals and allegations of unfair and/or discriminatory selection for redundancy. Please do get in contact.

Making employees redundant

We are specialist employment law solicitors and have dealt with a lot of redundancy situations for employers. This translates to cost savings for you as we can quickly determine how best to proceed.

• We cover all the areas you will need. We help you to document and justify your decisions in a way most likely to avoid an employment law claim.
• We can meet a short notice at our central London offices. You will be looked after by a partner.

Fair reasons for redundancy

A “fair reason” for an employee dismissal by reason of redundancy, is  a reason that is wholly or mainly attributable to the business:

• Ceasing trading;
• Relocating; or
• Requiring fewer employees for a particular task.

How to prepare to make staff redundant?

The key is :

• appropriate consultation with employees; and
• looking at any suitable alternative options to redundancy.

Before making staff redundant, it's generally key to prepare and we recommend the following for employers :

• Clear written redundancy procedures - these often form part of an employment or staff handbook and by having your process in a handbook it will not be part of the employment contract which should make it easier for an employer to update.
• Ensure you create a pool of employees potentially at risk - generally an important part of good practice.
• Give employees notice of potential redundancy - ensure employees are given sufficient warning of potential redundancies.
• Consult with employees at risk - listen and document.
• Selection criteria - make these objective and carefully considered, be consistent and document everything.
• Alternatives to redundancy - ensure you look at all possibilities and document your process.
• Redundancy employee right to appeal - ensure you communicate the right to appeal and follow the process involved.

Making more than 20 staff redundant

Employers who will make over 20 employees redundant in a 90 day period are obliged to consult collectively with employees. A failure to follow collective consultation can lead to penal damages awards of up to 12 weeks’ pay per employee.

See also our more detailed guide to making a large number of staff redundant.

Redundancy payments 

Employees who are dismissed by reason of redundancy may be entitled to a statutory redundancy payment.  The government increases statutory redundancy annually which depends upon the number of years of service and the employee's age.   Additionally, there may be an express or implied contractual right to an enhanced redundancy payment.

Redundancy notice

There are process requirements when considering staff redundancies. The correct notice of potential redundancies, usually in the form of a letter to employees, is very important both in terms of process and form.

Please get in touch.