What you need to know about redundancy – an employer’s guide
March 24, 2021
Right now, we know you’re facing tough decisions in the workplace, and redundancies are commonplace. Yet, a lack of basic understanding still surrounds redundancy in many businesses.
Our free restructuring toolkit is full of essential information and resources, including a general guide to redundancy, how the redundancy process works and templates for your business plan, consultations, meeting records, notice periods and at-risk employee communications.
In this blog, we’ll give you an insight into what you’ll find in our restructuring toolkit and answer your top 10 most pressing redundancy questions. Read on to gain a clear, practical grasp of redundancy to move forward confidently.
#1 – I have four people and three jobs. Can I make the last one redundant?
No, the “last in, first out” criteria was abolished years ago, as it paved the way for claims of indirect age and gender discrimination and unfair dismissal. Instead, use selection criteria or a competitive interview process to determine who you will make redundant.
#2 – Can I make redundant employees work their notice period?
Yes, as per the terms of their contract. Although employees can try to negotiate a shorter notice period with you, that’s your decision. If your employees refuse to work out their notice, they’ll be in breach of their contract, and you won’t have to pay them for this period.
#3 – Do I have to pay redundancy?
Yes. If your employees have more than two years’ service, they’re entitled to a statutory redundancy payment paid out by the employer.
#4 – Do I have to pay a redundancy notice?
Yes. Regardless of the length of service, all employees are entitled to a paid notice period during a redundancy.
#5 – Can I make a pregnant employee redundant? Yes, although not because she is pregnant. If you wish to make a pregnant employee redundant, you must follow the proper process and ensure her job is genuinely redundant. If you fail to do this, your employee can claim unfair dismissal on the grounds of her gender and circumstances.
#6 – Can I reinstate the job after making someone redundant?
No. The point of redundancy is that the job no longer exists, so you don’t require that employee’s services to fulfil it. If you immediately advertise for the same position after making someone redundant, it isn’t a genuine redundancy, and you could face legal action.
#7 – If business picks up following a redundancy process, can I reinstate the job?
You should wait between six to 12 months after a redundancy process before introducing and advertising for a similar role, or it won’t be a genuine redundancy. If trade has improved significantly after this period, you can review your requirements and proceed accordingly.
#8 – An employee I wanted to retain has volunteered for redundancy. What should I do?
Redundancy is an employer’s choice, not the employee’s. So, ultimately, it’s your decision to make. However, if your employee is volunteering for redundancy, they are likely to be unhappy in their job and may look elsewhere. Therefore, talk to the employee to address any concerns or issues they have to see if you can help them feel happier in their role.
#9 – Can I take redundant employees back if business picks up?
Yes, you can and should.
#10 – How do I stop redundant employees suing me?
You can’t unless you ask them to sign a Settlement Agreement. All employees have a right to take their claim to an employment tribunal if they feel you’ve treated them unlawfully. However, if you’re confident you’ve followed procedure and treated employees fairly, this shouldn’t pose an issue to your business.
How do I find bespoke redundancy support?
In this blog, we’ve covered the 10 most common questions you’ve asked us about redundancy.
However, if we haven’t answered your question here and you need further advice, we can offer you bespoke support designed around your needs and circumstances.
There’s no need to deal with your HR headache alone – let us ease the pain by providing practical support.
Call us on 0330 555 1139 or email firstname.lastname@example.org, and let’s see how we can help you navigate redundancies with confidence.