Fair Redundancy Procedure> <meta name="Description" content="Employment law advice on fair redundancy procedures. Central London EC1"/> <meta name="keywords" content="fair redundancy solicitors & lawyers London"/> <o:SmartTagType namespaceuri="urn:schemas-microsoft-com:office:smarttags" name="country-region"/> <o:SmartTagType namespaceuri="urn:schemas-microsoft-com:office:smarttags" name="place"/> <o:SmartTagType namespaceuri="urn:schemas-microsoft-com:office:smarttags" name="address"/> <o:SmartTagType namespaceuri="urn:schemas-microsoft-com:office:smarttags" name="City"/> <o:SmartTagType namespaceuri="urn:schemas-microsoft-com:office:smarttags" name="Street"/>  <style>  </style>  </head> <body lang=EN-GB link=blue vlink="#606420" style='tab-interval:36.0pt'> <div class=Section1> <table class=MsoTableGrid border=0 cellspacing=0 cellpadding=0 style='border-collapse:collapse;mso-padding-alt:0cm 5.4pt 0cm 5.4pt'> <tr style='mso-yfti-irow:0;mso-yfti-firstrow:yes'> <td width=1643 colspan=2 valign=top style='width:1232.1pt;background:#333399; padding:0cm 5.4pt 0cm 5.4pt'> <p class=MsoNormal align=center style='text-align:center;line-height:140%'><b><span style='font-family:Arial;color:white'>Ask Employment Law<o:p></o:p></span></b></p> </td> </tr> <tr style='mso-yfti-irow:1'> <td width=215 valign=top style='width:161.5pt;padding:0cm 5.4pt 0cm 5.4pt'> <p class=MsoNormal><span style='font-size:10.0pt;font-family:Arial'><o:p> </o:p></span></p> </td> <td width=1427 valign=top style='width:1070.6pt;padding:0cm 5.4pt 0cm 5.4pt'> <p class=MsoNormal><span style='font-size:10.0pt;font-family:Arial; color:black'><o:p> </o:p></span></p> </td> </tr> <tr style='mso-yfti-irow:2'> <td width=215 valign=top style='width:161.5pt;padding:0cm 5.4pt 0cm 5.4pt'> <p class=MsoNormal><b><span style='font-family:Arial;color:white'><o:p> </o:p></span></b></p> </td> <td width=1427 valign=top style='width:1070.6pt;padding:0cm 5.4pt 0cm 5.4pt'> <p class=MsoNormal><b style='mso-bidi-font-weight:normal'><span style='font-size:9.0pt;font-family:Arial'>Remember:<span style='mso-spacerun:yes'> </span></span></b><span style='font-size:9.0pt; font-family:Arial'>There is no substitute for legal advice on the actual situation you find yourself in. The information posted on this site is for general information only, is based on <st1:place w:st="on"><st1:country-region w:st="on">UK</st1:country-region></st1:place> law and should not be relied upon without specific legal advice, which is what I’d strongly recommend. If you can’t find the answer to your question or want to comment on this posting, email: <b style='mso-bidi-font-weight:normal'><a href="mailto:info@reculversolicitors.co.uk">info@reculversolicitors.co.uk</a> or call 0207 324 6271</b><span style='color:black'><o:p></o:p></span></span></p> </td> </tr> <tr style='mso-yfti-irow:3'> <td width=215 valign=top style='width:161.5pt;background:#333399;padding: 0cm 5.4pt 0cm 5.4pt;-moz-background-clip: initial;-moz-background-origin: initial; -moz-background-inline-policy: initial;background-position-x:0%;background-position-y:50%; background-attachment:scroll'> <p class=MsoNormal align=center style='text-align:center'><b><span style='font-family:Arial;color:white'><a href="http://www.askemploymentlaw.org.uk/index.htm" title="Click here to go back to the main index"><span style='color:white; text-decoration:none;text-underline:none'>Back to Index</span></a><o:p></o:p></span></b></p> </td> <td width=1427 valign=top style='width:1070.6pt;padding:0cm 5.4pt 0cm 5.4pt'> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial;color:black'><o:p> </o:p></span></p> </td> </tr> <tr style='mso-yfti-irow:4'> <td width=215 valign=top style='width:161.5pt;padding:0cm 5.4pt 0cm 5.4pt'> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial'><o:p> </o:p></span></p> </td> <td width=1427 valign=top style='width:1070.6pt;padding:0cm 5.4pt 0cm 5.4pt'> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial;color:black'><o:p> </o:p></span></p> </td> </tr> <tr style='mso-yfti-irow:5'> <td width=215 valign=top style='width:161.5pt;padding:0cm 5.4pt 0cm 5.4pt'> <p class=MsoNormal align=right style='text-align:right'><b><span style='font-size:9.0pt;font-family:Arial'>Question:<o:p></o:p></span></b></p> </td> <td width=1427 valign=top style='width:1070.6pt;padding:0cm 5.4pt 0cm 5.4pt'> <p class=MsoNormal><b><span style='font-size:9.0pt;font-family:Arial; color:black'>What is a fair redundancy procedure? <o:p></o:p></span></b></p> </td> </tr> <tr style='mso-yfti-irow:6'> <td width=215 valign=top style='width:161.5pt;padding:0cm 5.4pt 0cm 5.4pt'> <p class=MsoNormal align=right style='text-align:right'><b><span style='font-size:9.0pt;font-family:Arial'><o:p> </o:p></span></b></p> </td> <td width=1427 valign=top style='width:1070.6pt;padding:0cm 5.4pt 0cm 5.4pt'> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial;color:black'><o:p> </o:p></span></p> </td> </tr> <tr style='mso-yfti-irow:7'> <td width=215 valign=top style='width:161.5pt;padding:0cm 5.4pt 0cm 5.4pt'> <p class=MsoNormal align=right style='text-align:right'><b><span style='font-size:9.0pt;font-family:Arial;color:black'>Answer:</span></b><b><span style='font-size:9.0pt;font-family:Arial'><o:p></o:p></span></b></p> </td> <td width=1427 rowspan=3 valign=top style='width:1070.6pt;padding:0cm 5.4pt 0cm 5.4pt'> <p class=MsoBodyText><span style='font-size:9.0pt'>There are several different methods of carrying out a redundancy procedure fairly (which may depend on the particular nature of the business), and I can only give you a flavour here. Please note that if more than 20 people are being made redundant within a 90 day period, there is also a compulsory consultation period of at least 30 days and staff representatives must be elected. Employers can often be criticised for getting the procedure wrong, and it is quite common for employers to pre-judge the outcome of the redundancy procedure before it is even started. <o:p></o:p></span></p> <p class=MsoBodyText><span style='font-size:9.0pt'><o:p> </o:p></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:9.0pt; font-family:Arial;letter-spacing:-.1pt'>The employer should first of all consider the ‘pool’ of employees who they <b><i>may</i></b> wish to make redundant. The pool can be selected on amongst other things, the following basis:<o:p></o:p></span></p> <p class=MsoNormal style='margin-left:18.0pt;text-align:justify;text-indent: -18.0pt'><span style='font-size:9.0pt;font-family:Arial;letter-spacing:-.1pt'>- All employees;<o:p></o:p></span></p> <p class=MsoNormal style='margin-left:18.0pt;text-align:justify;text-indent: -18.0pt'><span style='font-size:9.0pt;font-family:Arial;letter-spacing:-.1pt'>- All employees within a particular department;<o:p></o:p></span></p> <p class=MsoNormal style='margin-left:18.0pt;text-align:justify;text-indent: -18.0pt'><span style='font-size:9.0pt;font-family:Arial;letter-spacing:-.1pt'>- All employees with a particular job title;<o:p></o:p></span></p> <p class=MsoNormal style='margin-left:18.0pt;text-align:justify;text-indent: -18.0pt'><span style='font-size:9.0pt;font-family:Arial;letter-spacing:-.1pt'>- All employees who do not directly generate income for the organisation;<o:p></o:p></span></p> <p class=MsoNormal style='margin-left:18.0pt;text-align:justify;text-indent: -18.0pt'><span style='font-size:9.0pt;font-family:Arial;letter-spacing:-.1pt'>- All employees outside the core operations of the organisation;<o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:9.0pt; font-family:Arial;letter-spacing:-.1pt'><o:p> </o:p></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:9.0pt; font-family:Arial;letter-spacing:-.1pt'>Sometimes employers will ask all the staff within a team to reapply for a reduced number of jobs. This is a potentially fair approach but can be criticised if for example the employer only relies on interviews rather than looking at appraisals and past performance.<o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:9.0pt; font-family:Arial;letter-spacing:-.1pt'><o:p> </o:p></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:9.0pt; font-family:Arial;letter-spacing:-.1pt'>Remember, The employer should <b>not</b> tailor the pool of potential redundancies to encompass the individuals the employer has already decided should be made redundant.<o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:9.0pt; font-family:Arial;letter-spacing:-.1pt'><o:p> </o:p></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:9.0pt; font-family:Arial;letter-spacing:-.1pt'>Before making any decision with respect to redundancies, the employer has a duty to consult with the employees who may be affected. </span><span style='font-size:9.0pt; font-family:Arial'>This is not specified by statute (unless 20 or more employees are being made redundant), but unless there are exceptional circumstances, this should be a <i>reasonable</i> length of time, or at least one week. It should consist of at least one meeting with the employee, plus giving the employee the option of a further meeting at the end of the consultation period.<span style='letter-spacing:-.1pt'> </span>The consultation is to include ways of avoiding the redundancy situation or dismissals, or of reducing the number of dismissals involved and mitigating the effects of the dismissals. The legislation does not require agreement to be reached but the employer must consult in 'good faith' with a view to reaching agreement. <o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:9.0pt; font-family:Arial'><o:p> </o:p></span></p> <p class=MsoNormal style='text-align:justify'><b><span style='font-size:9.0pt; font-family:Arial'>Nb</span></b><span style='font-size:9.0pt;font-family: Arial'>: The employer should not enter into a 'sham' consultation process in which the decision to make redundancies has already irrevocably been made, otherwise the dismissal may be rendered unfair. <o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:9.0pt; font-family:Arial'><o:p> </o:p></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:9.0pt; font-family:Arial'>Possible alternatives to making redundancies may include:<o:p></o:p></span></p> <p class=MsoNormal style='margin-left:18.0pt;text-align:justify;text-indent: -18.0pt'><span style='font-size:9.0pt;font-family:Arial'>The employee works fewer hours<o:p></o:p></span></p> <p class=MsoNormal style='margin-left:18.0pt;text-align:justify;text-indent: -18.0pt'><span style='font-size:9.0pt;font-family:Arial'>The employee agrees to a cut in pay<o:p></o:p></span></p> <p class=MsoNormal style='margin-left:18.0pt;text-align:justify;text-indent: -18.0pt'><span style='font-size:9.0pt;font-family:Arial'>Other savings are made<o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:9.0pt; font-family:Arial;letter-spacing:-.1pt'><o:p> </o:p></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:9.0pt; font-family:Arial;letter-spacing:-.1pt'>It is essential for the employer to ensure that <u>objective</u> criteria are applied to choose which individuals of the potential pool should be made redundant. It should be possibly to demonstrate how those objective criteria have been applied. This may be on the old fashioned 'last in first out' principle, or it may be on a more sophisticated score card approach. Employers should not decide who to dismiss in advance, and then seek to justify it after the event.<o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:9.0pt; font-family:Arial;letter-spacing:-.1pt'><o:p> </o:p></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:9.0pt; font-family:Arial;letter-spacing:-.1pt'>During the notice period (and sometimes the consultation period), it is essential for the employer to consider the employee for any suitable alternative vacancies within the organisation, or the group of companies if applicable. It is good practice for employers to forward the employee lists of all vacancies within the organisation (or group of companies if applicable). This should be done on a regular basis, either once a week, or when new vacancies arise. This way the employee can choose him or her self which vacancies to apply for. <o:p></o:p></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:9.0pt; font-family:Arial;letter-spacing:-.1pt'><o:p> </o:p></span></p> <p class=MsoNormal style='text-align:justify'><span style='font-size:9.0pt; font-family:Arial;letter-spacing:-.1pt'>It is essential for the employer to give the employee the right to appeal the decision to dismiss him or her. Failure to do so may render the dismissal unfair. Ideally the appeal should be heard by a more senior manager, unconnected with the original decision.<o:p></o:p></span></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial;letter-spacing: -.1pt'><o:p> </o:p></span></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial;letter-spacing: -.1pt'>Many employers will short circuit the redundancy process by offering enhanced redundancy terms in a compromise agreement. </span><span style='font-size:9.0pt;font-family:Arial'>A 'Compromise Agreement' is an agreement prescribed by statute to bring to an end certain statutory claims (ie unfair dismissal or discrimination) arising out of the employee's employment or termination of employment. <span style='letter-spacing:-.1pt'>It’s essential for the employee to get independent legal advice before doing so. Employers will generally cover the cost to the employee of getting that legal advice before deciding whether or not to sign away their legal rights, or whether to negotiate a better severance deal. <o:p></o:p></span></span></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial;letter-spacing: -.1pt'><o:p> </o:p></span></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial;letter-spacing: -.1pt'>See also: <a href="compromise_agreement.htm">Compromise agreements</a> & <a href="redundancy_statutory_pay.htm">statutory entitlement on redundancy</a> <o:p></o:p></span></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial;letter-spacing: -.1pt'><o:p> </o:p></span></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial;letter-spacing: -.1pt'>Last reviewed:<span style='mso-spacerun:yes'> </span>July 2010<o:p></o:p></span></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial;letter-spacing: -.1pt'><o:p> </o:p></span></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial;letter-spacing: -.1pt'><o:p> </o:p></span></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial;color:black'><o:p> </o:p></span></p> </td> </tr> <tr style='mso-yfti-irow:8'> <td width=215 valign=top style='width:161.5pt;padding:0cm 5.4pt 0cm 5.4pt'> <p class=MsoNormal align=right style='text-align:right'><span style='font-size:9.0pt;font-family:Arial'><o:p> </o:p></span></p> </td> </tr> <tr style='mso-yfti-irow:9;mso-yfti-lastrow:yes'> <td width=215 valign=top style='width:161.5pt;padding:0cm 5.4pt 0cm 5.4pt'> <p class=MsoNormal><b><span style='font-size:9.0pt;font-family:Arial'><o:p> </o:p></span></b></p> <p class=MsoNormal><b><span style='font-size:9.0pt;font-family:Arial'><o:p> </o:p></span></b></p> <p class=MsoNormal><b style='mso-bidi-font-weight:normal'><span style='font-size:9.0pt;font-family:Arial'><a href="http://www.reculversolicitors.co.uk/" title="Click here to read more about James Carmody"><span style='color:windowtext; text-decoration:none;text-underline:none'>James Carmody</span></a> <o:p></o:p></span></b></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial'>Employment Solicitor <o:p></o:p></span></p> <p class=MsoNormal><b style='mso-bidi-font-weight:normal'><span style='font-size:9.0pt;font-family:Arial'><o:p> </o:p></span></b></p> <p class=MsoNormal><b style='mso-bidi-font-weight:normal'><span style='font-size:9.0pt;font-family:Arial'>Reculver Solicitors<o:p></o:p></span></b></p> <p class=MsoNormal><st1:Street w:st="on"><st1:address w:st="on"><span style='font-size:9.0pt;font-family:Arial'>12-16 Clerkenwell Road</span></st1:address></st1:Street><span style='font-size:9.0pt;font-family:Arial'><o:p></o:p></span></p> <p class=MsoNormal><st1:place w:st="on"><st1:City w:st="on"><span style='font-size:9.0pt;font-family:Arial'>London</span></st1:City></st1:place><span style='font-size:9.0pt;font-family:Arial'> EC1M 5PQ<o:p></o:p></span></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial'><o:p> </o:p></span></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial'><a href="http://www.reculversolicitors.co.uk/"><span style='color:windowtext; text-decoration:none;text-underline:none'>www.reculversolicitors.co.uk</span></a><o:p></o:p></span></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial'><a href="mailto:info@reculversolicitors.co.uk"><span style='color:windowtext; text-decoration:none;text-underline:none'>info@reculversolicitors.co.uk</span></a><o:p></o:p></span></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial;color:black'>Tel 0207 324 6271<o:p></o:p></span></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial;color:black'><o:p> </o:p></span></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial'>Regulated by the Solicitors Regulation Authority<o:p></o:p></span></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial;color:black'><o:p> </o:p></span></p> <p class=MsoNormal><span style='font-size:9.0pt;font-family:Arial;color:black'>© Reculver Solicitors. 2005-<o:p></o:p></span></p> </td> </tr> </table> <p class=MsoNormal style='line-height:140%;background:white;-moz-background-clip: initial; -moz-background-origin: initial;-moz-background-inline-policy: initial; background-position-x:0%;background-position-y: 50%;background-attachment: scroll'><span style='font-size:10.0pt;line-height:140%;font-family:Arial; color:black'><o:p> </o:p></span></p> </div> </body> </html>