The MIA’s business helpline partner Croner have put together a very useful report on managing redundancy…
Following the collapse of Monarch Airlines 1,858 of the failed company’s employees have been made redundant.
The union Unite has announced that it is launching legal action on behalf of the Monarch workers who have lost their jobs after the airline went into administration. The action has been launched on the grounds that the airline failed to consult employees ahead of making them redundant.
Where an employer is proposing to dismiss ‘as redundancy’ 20 or more employees within a 90 day period, they must enter into a minimum consultation period.
In this case, given the number of employees affected, a 45 day consultation period would have applied. Failure to comply with the obligation to enter into collective consultation could result in a tribunal awarding affected employees a protective award of up to 90 days gross pay.
Redundancy situations affect every business and although unpleasant, are often necessary to ensure long term survival.
Top 10 Tips for Managing a Redundancy Situation:
1. Genuine Redundancy
Redundancy is one of the five potentially fair reasons for dismissal. However, as an employer it is your responsibility to show there really was a genuine redundancy situation. This is usually the case where a business is closing down, or if the need for employees to carry out work of a particular kind has ceased or diminished, or is expected to cease or diminish. Ensure everything is documented so you have evidence to prove to a tribunal that there was a genuine redundancy situation, and the role(s) of those being made redundant are really gone as a consequence.
2. Selection criteria justification
One of the big challenges of any redundancy situation is selection. Make sure that you identify all people who should be included in the selection pool. Your selection criteria must be applied consistently across the selection pool and they must be capable of being objectively justified. Avoid selecting people for redundancy purely based on personal views and focus on factual information like appraisal outcomes and attendance.
3. Discrimination is a definite NO
You must ensure that the redundancy selection criteria are non-discriminatory. This means you must not choose criteria, which if applied, could treat workers with a protected characteristic less favourably than those who do not share that protected characteristic. Protected criteria include: age, disability, gender reassignment, marriage or civil partnership, race, religious belief, sex and sexual orientation. For example, if attendance is a criterion, make sure you exclude any disability or maternity-related absence. You should also avoid using ‘last in first out’ as a sole criterion.
Being ‘fair’ is all about proper consultation. If you are proposing to dismiss as redundant 20 or more employees within a 90 day period – you will need to comply with the rules on collective consultation. It is also advisable to ensure that you hold one-to-one meetings with affected employees so that you can talk through the reasons for the employee’s selection and the possibilities for avoiding dismissals properly. It is important to keep notes of these consultation meetings.
5. Flexible timetable
Don’t make your timetable too rigid. It must be flexible to allow employees to come back for more meetings where there are issues to discuss, or where extra information is needed. If a group of people are at risk this will make the process longer. If you don’t build enough time in, you run the risk of being accused of not properly consulting those at risk. This could result in a claim that the procedure was unfair.
6. Gather ideas
It’s very important that you look at all options for how to reduce redundancies. This may include speaking to colleagues who are not at risk and offering them the option to take voluntary redundancy or job-share roles.
7. Alternative employment options
As an employer you are obliged to see whether there is any other suitable work available. You must provide full details of any vacancies so that employees can evaluate the opportunity properly.
8. Air any grievances early
Make sure that your consultation process allows those ‘at risk’ to air their grievances before they are selected for redundancy. If an employee does raise an issue, ensure you investigate and feedback to them fully before making the dismissal.
9. Procedures – The BIGGIE!
You must adhere to a fair and reasonable procedure. Before making any decision to dismiss, employers should invite employees to attend a formal meeting and allow them to bring a colleague or trade union representative in with them. It is advisable to use this meeting to recap on the process to date, and ensure that all alternatives to redundancy have been carefully considered before confirming any dismissal. Following the meeting, employers should confirm the outcome of the meeting in writing, and inform the employee that they have the right to appeal. If an employee does appeal, they must be invited to a formal appeal hearing with a manager not involved in the decision to dismiss. Employees have the right to be accompanied and employers must confirm the outcome in writing. Failure to comply with this procedure could result in a tribunal finding the dismissal was ‘procedurally’ unfair.
Northern Ireland employers must ensure that they comply with the Statutory Dismissal and Disciplinary Procedure, or any dismissal could be automatically unfair.
Throughout the consultation process, you will need to be aware of any contractual entitlements that affected employees may ask about. For example, eligibility for enhanced redundancy pay, bonus payments etc. Ensure that if your timetable does slip that contracts are re-reviewed and any outstanding benefits are paid. Employees who are dismissed on the grounds of redundancy will be entitled to either statutory notice or contractual notice, whichever is the greater.
MIA members benefit from FREE advice from Croner. Email firstname.lastname@example.org or call 01403 800500 for the exclusive Business Support Helpline scheme number.