Managing Redundancy
Managing a redundancy process
A Guest Article by Richard Linskell November 2007 www.tcii.co.uk Building Profitable Business
Managing a redundancy process
A Guest Article by Richard Linskell for TCii Management Consultants
Impact of the credit crunch
As a result of the recent credit crunch, many sectors are already starting to notice a downturn in business, or at least more difficult trading conditions. This may, in due course, impact on profits, leading many businesses to consider whether they need to make redundancies. Implementing redundancies can be one of the most difficult tasks which a manager faces. Not only will this be an emotionally charged process, but there is also a wealth of legal issues that need to be tackled. The purpose of this article is therefore to set out some practical advice on the steps which employers need to take before making any employee redundant. The starting point is to note that redundancy is often used euphemistically to cover any situation that is not gross misconduct. In fact, the statutory definition of redundancy is very precise and covers the following situations: • • where the employer needs fewer employees to do the same (or less) work; or where the business is closing down completely or moving to another location.
Before deciding to make an employee redundant, you should consider whether redundancies can be avoided by freezing recruitment, reducing overtime or taking other measures to address the situation, such as temporary redeployments (with consent, where appropriate). If it appears that redundancies may be unavoidable, a number of procedural steps must be taken before reaching a final decision, failing which any subsequent dismissal is likely to be unfair. This article does not deal with the additional procedural requirements that must be followed where 20 or more employees are at risk of being made redundant at the same establishment, in particular the obligation for collective consultation. If it
A Guest Article by Richard Linskell November 2007 www.tcii.co.uk Building Profitable Business
Managing a redundancy process
A Guest Article by Richard Linskell for TCii Management Consultants
Impact of the credit crunch
As a result of the recent credit crunch, many sectors are already starting to notice a downturn in business, or at least more difficult trading conditions. This may, in due course, impact on profits, leading many businesses to consider whether they need to make redundancies. Implementing redundancies can be one of the most difficult tasks which a manager faces. Not only will this be an emotionally charged process, but there is also a wealth of legal issues that need to be tackled. The purpose of this article is therefore to set out some practical advice on the steps which employers need to take before making any employee redundant. The starting point is to note that redundancy is often used euphemistically to cover any situation that is not gross misconduct. In fact, the statutory definition of redundancy is very precise and covers the following situations: • • where the employer needs fewer employees to do the same (or less) work; or where the business is closing down completely or moving to another location.
Before deciding to make an employee redundant, you should consider whether redundancies can be avoided by freezing recruitment, reducing overtime or taking other measures to address the situation, such as temporary redeployments (with consent, where appropriate). If it appears that redundancies may be unavoidable, a number of procedural steps must be taken before reaching a final decision, failing which any subsequent dismissal is likely to be unfair. This article does not deal with the additional procedural requirements that must be followed where 20 or more employees are at risk of being made redundant at the same establishment, in particular the obligation for collective consultation. If it