Making staff redundant

With falling rolls and tighter budgets on the way, staff redundancies may be on the horizon. An employer has a variety of obligations if it proposes to dismiss employees as redundant. Employers are under a duty to:

• provide formal notification to the secretary of state for Business, Enterprise and Regulatory Reform (BERR) where 20 or more employees are to be made redundant, using form HR1

• consult collectively if 20 or more employees are to be made redundant at one establishment

• consult with individual employees to ensure their dismissals are fair

• follow the three stages of the statutory dismissal and disciplinary procedure (DDP) for each affected employee (although the DDP will be abolished in April 2009 when the Employment Act 2008 comes into force)

• use objective criteria for selection and apply the criteria fairly and consistently

• give redundant employees proper notice under their contracts of employment

• grant reasonable paid time off work to redundant employees to help them seek new work

• pay statutory redundancy pay to those who qualify for it

The selection criteria used by the employer must be carefully and exactly defined so that it can be fairly and consistently applied to each employee. The criteria must also be agreed by the employees' representatives.

It is important to note that consultation must take place before any employees are issued with notice of termination of employment. The duty to conduct collective consultation with employees or their representatives arises where the employer proposes to dismiss 20 or more employees at one establishment within a 90-day period. The rules are as follows:

• Where 20 or more employees are to be made redundant at one establishment, the consultation period must begin at least 30 days before the first notice of dismissal is issued.

• Where 100 or more employees are to be made redundant at one establishment, the consultation period must begin at least 90 days before the first notice of dismissal is issued.

The very first thing that the employer must do is make a clear statement identifying the pool of employees from which the redundancies are to be sought. The employer should consider whether any of the jobs are interchangeable and whether there are other groups of employees performing identical work. Selection criteria for redundancy may include some kind of measure of skills, qualifications, aptitude, or performance, attendance or disciplinary records. Your local authority will be able to advise you in your particular situation. The following criteria are considered unfair and can give rise to claims under unfair dismissal or the relevant discrimination laws:

• trade union reasons

• carrying out duties relating to redundancy, as an elected representative of the employees

• maternity grounds

• sex, race or disability grounds

It is also important to remember that it is the post that is to be made redundant and not the person.

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Further reading

For more information on redundancy see Richard Bird's column.