The statutory definition of redundancy is when the dismissal is wholly or mainly attributable to the fact that the needs of the business for employees to carry out work of a particular kind in the place where the employee was employed cease or diminish.Not only must there be a fair reason for redundancy, but the employer must follow a fair redundancy procedure.
Employers often get it wrong when they’re selecting people for redundancy. Here are just some examples of how the process can go awry:
- Prejudging the outcome: The number one sin that many employers commit, is to decide to get rid of a particular employee, and then to retrospectively justify the decision by calling it ‘redundancy’. If you do want to implement a redundancy, it should be or operational reasons, not because a particular person’s face doesn’t fit. Having said that, it can sometimes be difficult for the employee to prove that is what occurred if the employer’s redundancy procedure appears on the face of it to be fair.
- Changes to Existing Roles: Often, in a team of (say) five, the employer will put all positions at risk of redundancy, but then create the same number of new positions. In this case, a careful analysis of the old and new job descriptions will be required. Some employers will only make superficial changes to the job title and some aspects of the role. In this case the employee may be able to argue that there are no substantive changes to her existing role, and that therefore the statutory definition of redundancy is not satisfied.
- The Redundancy Pool: There are several approaches to constructing a pool of employees from whom redundancies will be selected. Sometimes the pool will be everyone in a particular department; sometimes it will be everyone with the same job title; sometimes it will be everyone performing a particular function. However if only one person has been put at risk of redundancy, then alarm bells will ring. There may be legitimate reasons to do so (for example if the manager of a team is being put at risk to flatten the management structure), but often this suggests prejudgment.
- Alternatively the employer will say that they have already scored the members of the team but will only put the employees with the lowest scores ‘at risk’. Again this suggests prejudgement of the outcome of a fair redundancy selection exercise, though they should consult on the proposed redundancy selection criteria before applying them.
- Selection Criteria: As mentioned above, employers should consult with affected staff on the proposed redundancy selection criteria before applying them, but not all do. Employers often rely on vague and woolly selection criteria, such as ‘ability to adapt’ without any objective justification for their score. Some scores are at complete odds to the annual appraisals of the employees at risk.
- Alternatively employers will rely on objective criteria such as sales figures, but will then choose a period which skews the results against the person they don’t want to keep. Sometimes, employers won’t compare like for like; for example comparing the sickness absence record of one person with three years service against another with only 6 months service (who inevitably will have had less sick leave)
- Interviewing for the remaining roles: Instead of using a selection criteria score card approach, some employers will interview at risk employees for the remaining positions. Employers should ensure that they ask the same questions of all candidates and keep a record of the answers. Again this is an ideal opportunity to score-down the person they want to get rid of. However if the matter gets to a Tribunal, they will have to disclose the interview score notes for each candidate and explain their results to a Judge.
- Suitable alternative vacancies: Some employers take the view that consultation is only about looking at alternative vacancies within the organisation. This is not the case; consultation should normally include discussion of why the redundancies have arisen, any possible alternatives to redundancy, and redundancy selection criteria as well. Employers are not obliged to ring fence vacancies for only those at risk, but equally should not exclude employees from applying for relevant positions.
Reculver Solicitors has developed a Redundancy and unfair dismissal Calculator tool which the statutory redundancy payment; the statutory notice period, payment in lieu of notice and a possible unfair dismissal award if out of work for six months.
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