Employers must constantly evolve their workforce to meet their business needs, improve productivity or respond to changes in their industry or the wider economy. This can lead to the need to make redundancies or restructure the business.
Such processes must balance the rights of employees with the needs of the business. Failure to properly consult with employees, or follow the correct procedures, can lead to costly Employment Tribunal claims for unfair dismissal.
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If you need to make redundancies in your business, you have to follow a particular process, which can alter depending on how many individuals will be dismissed. In summary, you first have to warn the affected employees that there will likely be redundancies. Then you should undertake a process of consultation with each affected person. Your final decision should be communicated to the employee in writing, together with a right of appeal.
As part of the process of consultation, you should consider if there are any other appropriate vacancies, which the affected employee could move to, instead of being made redundant. This can include a demoted post or a completely different role.
When choosing which employees from a larger pool are to be made redundant, you have to apply relevant criteria that will be used to select them. Such criteria should be fair and measurable, and based on objective factors, such as time-keeping, and adjusted to remove any discriminatory elements (i.e. disability related absence).
In some circumstances where you are altering the structure of your business, it may be appropriate to use an internal interview process to help select the appropriate candidate for the role.
Statutory redundancy pay is based on age and length of service and subject to a cap on earnings, although more generous provisions can be provided for in the contract of employment.
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