Making Redundancies

We can advise businesses of all shapes and sizes, and from a variety of industry sectors.  We can provide advice and guidance to you on the following:

1. How to use a fair selection process to choose employees for redundancy 
2. The consultation process that you must go through with the employees selected for redundancy (including collective consultations for larger groups of employees)
3. Dealing with any negotiations with employees selected for redundancy
4. The use of settlement agreements in the redundancy process
5. Any appeals and/or claims raised by any employees selected for redundancy. 

Large scale redundancies (20+ employees)

If you are proposing to make 20 or more employees redundant, within a 90-day period, then this will be, what is known as, collective redundancy and you are required to follow an additional collective consultation process. If there is a recognised trade union, then you will also need to consult with the union, and you will also need to notify the Department for Business, Energy and Industrial Strategy of the proposed collective redundancies.

Should you be considering making 20 or more employees redundant, we can guide you through the entire process and provide you with pragmatic advice to ensure that your business’ interests are best protected.

What to do before proceeding with redundancies

Before proposing any redundancies, you should carefully consider all available options to avoid them, such as:

• Offering voluntary redundancy or early retirement to employees who may be interested

• Ensuring you are not recruiting for the roles under consideration for redundancy

• Exploring opportunities to redeploy affected employees to suitable alternative roles within the business

Failing to consider all reasonable alternatives could expose your business to unfair dismissal claims from employees who are ultimately made redundant.

How much redundancy pay will employees be entitled to? 

Employees who have at least two years of continuous employment with your business, and who are made redundant, will be entitled to statutory redundancy pay. The redundancy payment is calculated based on the employee’s age, their full years of employment with the business, and a capped weekly salary.

The statutory redundancy payment is the minimum sum that you must pay to that employee, however many businesses choose to offer more than the statutory minimum. If you are considering offering enhanced redundancy payments to your employees, you must ensure that the calculation for this enhanced redundancy payment is applied fairly to your employees (and should not be based on any criteria that could be considered discriminatory).

It is also highly sensible to require all employees to sign a settlement agreement in return for receiving the enhanced redundancy pay, as this reduces any risk on the part of the business of any employee bringing a claim following their receipt of the additional severance pay.