FAQs: Making Employees Redundant

1. How do you handle mass redundancy?
2. What is the threshold for collective redundancy?
3. What is the criteria for redundancy?
4. How is redundancy calculated?
5. What are the disadvantages of mass redundancy?
6. You have to make redundancies and you are preparing the selection criteria. How can you avoid inadvertently discriminating against anyone?
7. One of the people whose role is disappearing has mobility problems covered by the Equality Act. There is a possible alternative post, but this would mean travelling 30 miles to a new site. Does this fit the requirement that you have to offer ‘suitable’ alternative employment?
8. Some employees in the selection pool are on maternity leave. Should you ask them to come in for meetings?

How do you handle mass redundancy?

When making multiple employees redundant, it is vital to ensure that the process is carried out fairly. There are specific timescales for collective redundancies and employers must hold collective consultation on their redundancy plans with any recognised trade union or, if there is not one, employee representatives.

Employers must hold a collective consultation when all of the following apply:

• They are planning 20 or more redundancies
• The redundancies are in one establishment
• They plan to make the redundancies within 90 days

A specialist Employment Law solicitor will be able to guide you through a fair and transparent collective redundancy process.

What is the threshold for collective redundancy?

Employers should not decide on any redundancies before carrying out a collective consultation. This includes leaving enough time for the employer to consult employees and their representatives and to put in place their suggestions that the employer has agreed to.

The timing for redundancies depends on how many the employer intends to make. For between 20 and 99 redundancies they should begin collective consultation at least 30 days beforehand – for over 100 redundancies at least 45 days before. It is good practice to start earlier, where possible, in order for the employer to ensure they meet collective consultation requirements.

What is the criteria for redundancy?

Redundancy is where a role or a number of roles are no longer required by an organisation. Alternatively, there may be a surplus of labour requiring fewer people to carry out the same work. In this case, a number of employees will be chosen for redundancy out of a pool of employees carrying out the same or similar jobs. Fair selection criteria includes performance, skills and other essential attributes necessary for carrying out the job, which can be measured objectively.

How is redundancy calculated?

Employees who have worked for an organisation for at least two years are entitled to statutory redundancy pay. The amount of statutory redundancy pay an employee rill receive will depend on their age and how long they have worked for their employer.

Employees will receive half a week’s redundancy pay for each full year they were under the age of 22, one week’s pay for each full year they were 22 or older, but under 41, and one and a half week’s pay for each full year they were 41 or older. Length of service is capped at 20 years. The statutory cap is currently £643 per week.

What are the disadvantages of mass redundancies?

While mass redundancies will result in a reduction in overhead costs including payroll, benefits and insurance, there are downsides. These can include issues for the remaining staff such as low morale issues and having to cover other people’s work. This is why it is important that when consulting over redundancies everyone is included to avoid remaining staff being overloaded.

You have to make redundancies and you are preparing the selection criteria. How can you avoid inadvertently discriminating against anyone?

Your criteria will determine how individuals will be selected from your pool of potentially redundant employees. Criteria must not be discriminatory and must stand up to objective assessment. In particular, be careful of indirect discrimination.

For instance, could criteria have a disproportionate effect on an ethnic group, a particular sex or a disabled person?

Criteria based on flexibility in relation to working hours, for example, may adversely affect single parents. Because a greater proportion of single parents are women, this may constitute indirect sex discrimination.

Likewise, be careful using sickness absence in your selection criteria. Making a decision based partly or solely on time off in relation to pregnancy-related sickness would constitute sex discrimination.

Similarly, where an employee’s physical or mental impairment has a substantial and long-term effect on their ability to carry out normal activities, they are covered by the Equality Act. In such cases you cannot count time off related to an employee’s disability.

‘First in, last out’ is increasingly unpopular as a selection criteria as it does not consider the skills the business needs going forward. It is also potentially discriminatory both on the grounds of age, as it disadvantages your younger employees, and on the grounds of sex as women are more likely to take career breaks.

Although both examples of indirect discrimination may be defended if you can objectively justify using such criteria, it would be safer to only use ‘first in, last out’ with a number of other criteria and not make it the sole reason for selection.

One of the people whose role is disappearing has mobility problems covered by the Equality Act. There is a possible alternative post, but this would mean travelling 30 miles to a new site. Does this fit the requirement that you have to offer ‘suitable’ alternative employment?

As an employer, you have a duty to make ‘reasonable adjustments‘ to cater for any of your employees considered ‘disabled’ under the Equality Act.

What is considered a ‘reasonable adjustment’ will vary depending on your organisation’s size and resources. This duty relates to the entire redundancy process including any offer of alternative employment.

There is case law which ruled that travelling 50 miles to an alternative position was too far given the individual’s severe arthritis. The Judgment made it clear that a reasonable adjustment should have been made in the form of an alternative position being offered in the individual’s home town, where he had previously worked.

Use the redundancy consultation to ask your employee whether the distance is problematic. If he has problems driving to and from this site – and for business reasons cannot stay where he is – Access to Work may help with finding alternative transport such as taxis and providing funding for these costs.

Some employees in the selection pool are on maternity leave. Should you ask them to come in for meetings?

It is essential to consult with your employees on maternity leave. Write to them explaining the situation and give them the option of attending.

If they have recently had their babies, offer to liaise virtually on Zoom or Teams, or by email or telephone. Failure to consult with someone on maternity leave is potentially discriminatory.

If you do select employees on maternity leave for redundancy, the reason must have nothing to do with their pregnancy or maternity leave.

For expert Employment Law advice on redundancy, contact our team today on 01273 609911, or email info@ms-solicitors.co.uk.