Managing redundancies

Our team of employment law solicitors and HR professionals are experts at handling all stages of the redundancy process. They are well-equipped to support all parts of your project, including but not limited to planning, consultations, administration, management and outplacement support.

Making a significant number of redundancies can strain your business, and your HR people may struggle to manage them effectively alongside their normal work.

Our legal professionals work with human resources experts to achieve commercially aware results while following best practices in accordance with the law.

What do we offer?

Our team can:

advise on the process for small-scale and collective redundancies
produce project plans, timetables, lists of frequently asked questions, and all communications required for the consultation, and completion of redundancy exercises
train your line managers on the redundancy procedures and train employee representatives on their role in the consultation process where required
manage the consultation process for you if needed, attending and running meetings, usually alongside your managers
support your managers, to ensure the process is legally compliant
provide 'on the ground' assistance to enable you to deal with more consultation meetings in less time
draft responses to questions that arise during the consultation
deal with administration either on behalf of your organisation or as an extension of your existing HR team
support the appeal process
provide outplacement services, fulfilled by experienced coaches and occupational psychologists.

Why use us?

Our team has over 50 years of experience advising on large scale reorganisations, redundancies and TUPE transfers.
We have helped businesses to change contractual terms and conditions, including implementing remote working, reducing hours and imposing pay cuts.
We have effectively managed collective consultations and individual redundancies on behalf of our clients.
We have provided large teams of 'on the ground' HR professionals to allow our client to efficiently manage a large scale redundancy exercise in a short space of time.
We are proud to offer commercial, pragmatic, and legally sound advice to help protect our clients and enable them to thrive.
We have a uniquely practical approach to legal and HR services, adapting to your business's way of working in order to find a solution that suits your individual needs.

"Watershed helped and supported this turnaround with diligence and respect for the people directly affected whilst remaining impartial and highly professional throughout.

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What is redundancy?

'Redundancy' is a dismissal where there is a business closure, workplace closure, or a reduction in the workforce. It happens when an employer is ceasing or is intending to cease its business, either entirely or at the employee's place of work. It also applies where there is a reduced requirement for employees to carry out work of a particular kind or at the place where the employee is employed to work. Some re-organisations and staff reductions don't fall within the true definition of redundancy. It is important to understand when a specific situation is not a redundancy, but even if the term does not strictly apply, a similar process will be required for a dismissal to be fair.

Handling redundancies correctly

Whilst redundancy is a potentially fair reason for dismissing an employee, the process must be fair to avoid a successful claim for unfair dismissal. It is usually difficult for an employee to come to terms with redundancy and they will often challenge it. Claims against the employer are relatively common. The better the redundancy process, the less likely an employee is to feel badly treated and bring a claim. Our solicitors can help you to deal with redundancy in a way that is as respectful of employees' feelings as possible, and is fair so that if there is a claim it can be defended.

A small scale redundancy process involves notifying staff members that they are at risk, carrying out any appropriate selection, then inviting employees to individual meetings to consult them about the situation. Wherever possible, the process must consider alternative employment. There will often be several meetings before a final decision to confirm the redundancy or not. The employee will be informed about the outcome and the decision will be provided in writing with a right to appeal. The details will include when their employment ends, which usually depends on their notice entitlement, and what their redundancy pay will be and how it is calculated.

Collective consultation

If an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less there are additional requirements. The employer must inform and consult appropriate representatives of the employees. There must be at least 30 or 45 days, depending on the number of redundancies, between the start of consultation and when the first dismissal takes effect. The requirements are quite specific and have some complexities; failure to properly comply with the rules can mean the employer is liable for a protective award of up to 90 days' pay per affected employee, in addition to any other claims, for example for unfair dismissal, which are usually brought at the same time.

While collective consultations can seem overwhelming, time-consuming and complex, our legal team can guide you through the process in a timely way, mitigating risk, minimising disruption and saving cost.

Planning for redundancies

Before you announce your intention to make redundancies, it’s important to carefully plan the entire process. While our team can support specific stages, we also offer complete end-to-end project management for the smoothest possible outcome. Employers should be aware that the obligation to collectively consult is usually triggered early, before you make a firm decision about redundancies, so taking advice is essential.

Redundancy starts with identifying either stand-alone roles that are no longer required, or a suitable pool of employees who have the same or similar roles or interchangeable skills.

Selecting employees

Where there is a pool, the employer must make provisional selections for redundancy. The decision is usually made by giving scores to a number of relevant objective criteria, such as skills that need to be retained, performance, attendance, disciplinary record and length of service. Those with the lowest scores are provisionally selected for redundancy, subject to consultation. It is useful to get advice on the scoring criteria and their application.

Certain criteria can be inadvertently discriminatory (for example 'last in, first out'), and it can be tricky to score those who have been absent for a period of time for example on maternity or shared parental leave, or long term sick. Using certain characteristics, such as trade union membership, pregnancy or maternity leave, or part-time work, will always be unfair and can be discriminatory.

Sometimes compulsory redundancies can be avoided by asking for volunteers. However, in many cases, they will still be necessary. Voluntary redundancy has advantages and disadvantages, so needs careful consideration. It is usual to offer an incentive to volunteers, such as an enhanced payment or not having to work any notice period. A settlement agreement can also be useful. We can help you to consider how best to offer voluntary redundancy, if it's right for your business and draft a settlement agreement when needed.

Redundancy pay

If the redundant employee has been working at your business for more than two years, they will be entitled to redundancy pay. The amount will depend on their age, salary and total length of service. You may decide to offer employees more redundancy pay, particularly if they volunteer. In some situations you may not have to make a redundancy payment, for example in some cases where an employee unreasonably refuses an offer of suitable alternative work. The rules can be complex, so you should seek advice before withholding redundancy pay.

Support for redundant employees

Redundancy can adversely affect an employee’s mental health and many businesses choose to offer additional support to those who have been selected. Offering counselling services will help you to safeguard your staff members’ wellbeing. You may also decide to offer employees an occupational health assessment should they become unwell during the process. Some businesses continue to offer counselling for several months after employees have been dismissed.

It’s important to consider not only those who have been selected for redundancy, but your remaining employees as well. Laying off members of staff can cause colleagues to worry not only about the security of their own jobs but also a potentially larger workload. While these employees may not require counselling, they should be made aware of the redundancy exercise and the reasons for it, and receive adequate information and support from the business to avoid disruption and morale problems.

Our HR professionals can help you to deliver these messages sensitively, allowing your employees to understand the wider situation. We can also coach managers on the best way to handle any problems arising from employee uncertainty. It’s important to boost the morale of existing staff as much as possible, allowing your business to progress positively.

Reorganisation

If your business is making redundancies, you may also have to reorganise existing employees into different roles or locations. This can be time-consuming, particularly if they have to be trained in new skills. Our HR team can help not only with the redundancy process, but the aftermath as well. We will advise you on your next steps and how to communicate any changes in employment to your staff. Should you need to draw up new contracts, we’re well-equipped to assist with that as well.