Redundancy and reorganisations

Redundancy and Reorganisations

Organisations are not static entities and on occasion you may need to complete a reorganisation of how you work. This could be a positive change, with you adding new roles and splitting responsibilities to help you grow; it can also mean closing all or part of your operations. No matter what the situation, you need experts to come alongside you to ensure that you execute this well. Being made redundant is a form of dismissal and there are regulations to ensure that this is done fairly.

What is a genuine Redundancy situation?

Redundancy occurs where your dismissal is:

  • wholly or mainly attributable to the fact that your employer has ceased or intends to cease to carry on the business for the purposes of which you were employed, or in the place where you were employed; or
  • the fact that the requirements of your employer for employees to carry out work of a particular kind, or for employees to carry out of a particular kind in the place where you were employed have ceased or diminished or are expected to cease or diminish.
What this means is that the work that the employee needs to complete may reduce or stop. It doesn’t necessarily mean that the employer is in financial difficulty as the employee may not be skilled to take on other work that is actually increasing. So if the employee can not be reasonably retrained to complete other work or if fewer people are required to complete the work (due to automation for example), then this can be a genuine redundancy. 

Genuine redundancy

Examples of when someone may be genuinely redundant include:

  • the work the person does is no longer needed due to a downturn of business, a new line of work which requires a different skill set, or a new process being introduced (see below under “redundancy situations);
  • the employee’s job no longer exists because the work is being done by other employees;
  • the workplace has closed because the employer has ceased trading or has become insolvent;
  • the employer’s business, or the work the person is doing, moves to another location;
  • the employer’s business is transferred to a different employer (TUPE).

Even if there is a genuine redundancy situation, your employer must still follow a correct redundancy process (see below) failing which the redundancy can still be deemed to be an unfair dismissal.

What process needs to be followed?

Selection criteria

If you are proposing to reduce, but not remove, the need for work to be completed, then you need to come up with some fair selection criteria.

Gov.uk lists the following fair reasons for selecting employees for redundancy:

  • skills, qualifications and aptitude
  • standard of work and/or performance
  • attendance
  • disciplinary record

You can select employees based on their length of service (‘last in, first out’) but only if you can justify it. It could be indirect discrimination if it affects one group of people more than another.

Consultation

The law requires you to consult when making people redundant. The timeline varies depending on the number of employees being made redundant in any one establishment.

  • Under 20 employees – no fixed timeline
  • 20-99 employees – 30 days
  • Over 100 employees – 45 days

Consultation should be meaningful and where collective consultation bodies are in place, should allow the representatives to come up with counter-proposals which then need to be seriously considered by the employer.

How can we help you?

Cornerstone Resources can help you at each stage of the redundancy or restructure process. This includes:

  • Establishing the need for redundancies
  • Creating fair selection criteria
  • Supporting the consultation process and completing associated paperwork
  • Completing redundancy calculations
  • Helping affected employees access support to get alternative employment.

Who are Cornerstone Resources?

Based in South Manchester, Cornerstone Resources offer a complete HR service to businesses, charities and churches. With over 40 years combined experience in HR, we can offer you an enviable combination of professional expertise and a service based on integrity and honesty. Best of all, we can save you time and money. 

For more information on our offering, including cost effective Employee Relations support, click here. For a no obligation quote, call us today on 07494 161169 07908 875146 or click the below button to email us.