HR Update: How to handle redundancy

If you are reducing your headcount it is vital that everyone understands the process to be followed. This means having a redundancy policy in place which ensures all employees are treated fairly and consistently, says Jacqui Mann, managing director of HR4Nurseries (www.hr4nurseries.co.uk)

Your policy should outline the main areas that need to be covered during the redundancy process:

Selection

Where more than one employee is at risk, selection criteria should be used. Employees have the right to be consulted over the selection criteria.

Consultation meeting

This should include:

• The reason for redundancy

• Why and how individuals have been selected

• Possible ways of avoiding the redundancy

• Possible alternative work.

Individual consultation

Employees must be invited to a meeting to discuss the potential redundancy. They have a statutory right to be accompanied at the meeting by a work colleague or a trade union representative.

Redundancy payment

Only employees who have two or more years' service qualify for a redundancy payment. The statutory payment is currently a maximum of £430 per week. Payments are based on the age of the employee and their length of service. The maximum of 20 years redundancy can be paid.

Alternative work

Employers must consider suitable work within the company. If an employee unreasonably refuses a suitable alternative, they may no longer have a right to a redundancy payment.

Time off

Any employee facing redundancy is entitled to take reasonable paid time off to seek work or attend training.

End of consultation

Employees must be invited to a second meeting to discuss the potential redundancy. This is an opportunity for the employee to put forward any suggestions or proposals they have for not making the role redundant. The outcome of the meeting must then be confirmed in writing. The letter should state the date of the dismissal due to redundancy and any payments that are due to the employee.

Appeal

Employees have the right to appeal against the decision. They should be advised who to appeal to and the timescale within which they must appeal.

Make sure that you follow your redundancy procedure - otherwise employees may claim unfair dismissal.

Sickness absence and maternity leave

Employees who are absent through sickness or on maternity leave must be consulted with in the same way as those at work.