What is redundancy?
Before considering redundancy, it’s important to first understand exactly what it means and how it differs from other instances where an employment contract is terminated. Redundancy can only occur if an employee is dismissed as a result of their particular job no longer existing – either because business processes have changed (e.g. due to automation) or because financial pressures have resulted in a reduction of work or closure of a department or the entire business. It’s important to note that employees cannot be made redundant on grounds of misconduct or poor performance; these matters need to be dealt with through a disciplinary procedure.
Selection for redundancy
If a certain role within the company has been completely abolished (e.g. newly implemented technology has essentially made a job redundant), there may be no requirement for a redundancy selection process. But if one or more redundancies are taking place amongst a group (or “pool”) of people doing a similar job – either because cost saving measures are being implemented or there is semi-automation – then it will be essential to carry out a careful selection process.
The first step is to create a redundancy pool consisting of employees who perform the same or similar roles whose jobs are at risk, and informing them. A set of selection criteria should then be applied to each member of staff within the redundancy pool, methodically and objectively, in order to decide who should be made redundant. The criteria can include skills and experience, attendance records, relevant qualifications and appraisal ratings – but avoid anything which could be considered discriminatory or subjective (e.g. maternity leave should not be considered in terms of attendance).
Prior to carrying out a redundancy selection process, employers should consult with members of staff who are in the redundancy pool to ensure there are no reasonable objections to the selection criteria. Further consultation should take place following selection. If 20 or more employees are being made redundant, there are special rules which must be followed.
The employment law team at CH Legal can help explain the process of redundancy and help you carry it out properly, in order to avoid any potential claims. To find out more, get in touch with Caroline Tomlinson or call 0845 4786 354.