Redundancy Process: The Ultimate Guide to Avoiding Legal Troubles
Redundancy is the special situation in which a role is no longer required. In itself it’s not intended to remove a Poor Performer (for that, see dismissal). However, when deciding who to make redundant, it generally makes sense for employers to choose the Poor Performers first.
A job may no longer be required for a variety of reasons. Smaller organisations still in the early phases of the business life cycle often find they don’t have good product-market fit, so need to make cuts. Sometimes, they haven’t achieved the necessary efficiencies, so need to reduce costs. Larger organisations at a later stage of the life cycle sometimes find it necessary to adapt as the market changes and have to make redundancies. Changing consumer preferences might affect product-market fit; there might be other kinds of restructuring needed in order to increase profitability that affect staffing levels.
Redundancy is a serious matter that can have a significant impact on individuals. It’s important to handle the situation with sensitivity and fairness, and to stay within the law.
Before making someone redundant you should consider alternatives, such as moving an employee to another role or reducing working hours. I wouldn’t advise the creation of a new role unless it adds value for customers that they’re willing to pay for.
The law requires you to follow a fair, transparent and objective process. If you have regularly benchmarked employees against the Great Performance Profile, this may be considered an acceptable assessment. This is because it uses objective criteria such as skills and performance.
In some cases, employers may need to consult with employees and their representatives in order to explain the reason for redundancies and discuss the selection criteria.
Employees may have an opportunity to appeal the decision, particularly if they feel the selection process was unfair.
Employees may be eligible for redundancy pay and adequate notice in accordance with employment law and company policies.
Because redundancy can lead to complications as a result of legal requirements and the nuances of contracts of employment, I recommend that you seek advice from a solicitor or HR professional. It goes without saying that throughout the process you should treat people with respect and dignity and as you would wish to be treated in the same situation.