Dax looks at the factors business owners should bear in mind if considering redundancies
We live in uncertain times. The cost-of-living crisis generally and increasing energy costs, allied to post-Brexit trade issues, are daily news stories. There is dark talk of a possible recession looming. Whilst it is early days, my experience is that the number of redundancies being made by businesses may be increasing.
If a business is to stop operating entirely, the issue of staff redundancy is straightforward and self-evident. However, if business owners feel the need to reduce workforce numbers rather than close the business altogether, that is potentially a trickier situation. The business is likely to need some professional help in negotiating its way through the redundancy process, drafting settlement agreements for staff who are to exit the business (not always on good terms) and reviewing or implementing company policies to provide a procedural framework when making staff redundant.
If an employee brings an unfair dismissal claim against a business because they think they were unfairly made redundant, it is unlikely that an Employment Tribunal will find that the employee has been unfairly dismissed if the business decision to make the redundancy isn’t obviously flawed and if a fair redundancy process has been followed. That obviously makes the redundancy process itself extremely important. It is vital that staff at risk are consulted at all times and are given the opportunity to provide input into the process. If the staff at risk are to be scored against a selection criteria, that criteria must be fair and fairly applied.
Alternatives to redundancy must also be considered. Redundancy consultation timetables must be reasonable, and staff must be given the chance to appeal the decision made.
There may of course be alternatives open to the business other than compulsory redundancy, but these issues too can be complex, and the business is likely to need professional advice on how to negotiate potentially difficult situations.
It might be that the plan is to temporarily lay staff off, in the hope that business can pick up again enabling the staff to return to work normally in the future, to implement pay freezes (or cuts), or similar approaches. In such a situation it will be crucial for the business to ensure that decisions made are contractually sound to avoid possible challenges by staff members.
If you would like to speak to Dax Keeling about advice with making redundancies, please contact him on 0114 220 2172 or d.keeling@bellbuxton.co.uk
