Your essential guide for the redundancy process

While researching for this blog on redundancy, an online search in the news section using that term produced some results that made for worrying reading.

A range of workers across the NHS, local councils, charities, media, theatre, and universities are currently reported to be at risk of losing their jobs.

Knowing the redundancy process, understanding what to expect, being aware of your rights, and even refreshing your knowledge have never been more important

A report based on the most recent figures from the Office for National Statistics, at the time of writing, suggests that the UK labour market has continued to weaken -shedding a further 8,000 jobs in June and 165,000 since its recent peak last October (1) [cited16.9.25] 

It is said jobs are being lost the fastest in the low paying hospitality sector, suggesting that the mini shock of the employer NI and National Living Wage rise combination in April is still feeding through (2) [cited 16.9.25] 

The current operational and financial challenges faced by employers across all sectors mean that almost any employee could face the dreaded threat of redundancy.

It can, understandably, be a difficult and stressful process for both the employee and the employer, who may be forced to cut jobs due to a lack of viable alternatives.

The process leading to redundancy must be fair and legal. Understanding it and knowing your rights if you find yourself in this unfortunate position, is vital.

Here we take a closer look at the redundancy process and outline key steps to help you understand your rights and how a fair procedure should be carried out.

What is a genuine redundancy situation?

The answer to this question is important because employers have been known to try to use redundancy as a cover to dismiss someone when it is not a genuine redundancy situation.

ACAS advise (3) [cited 16.9.25] :

Redundancy is usually a type of dismissal when a role is no longer needed. Your employer should only consider making redundancies if part or all of the organisation is:

• closing, or has already closed
• changing the types or number of roles needed to do certain work
• changing location

If the main reason for your dismissal is something else, for example, your performance or conduct, it's not redundancy.

In this case, before dismissing you, your employer must follow either a:

• disciplinary procedure.
• capability procedure.

Prior to any redundancy announcement

Employees may not always be aware of the steps that should be taken to ensure a redundancy process is fair before any announcement is made.

Redundancy should always be a last resort. Alternative ways to save money or overcome operational challenges must be considered before deciding to cut jobs. In some cases, changing how work is carried out, or where it is done, can resolve issues and prevent job losses.

If it is clear that jobs are genuinely at risk, one of the most important things an employer can do is check whether affected employees can be offered alternative roles within the organisation. This can help to retain valued and experienced staff and reduce the stress and disruption caused by redundancy.

Although not ideal, employers could ask staff to work fewer hours for an agreed period of time as a temporary measure to reduce costs and potentially preserve jobs.

Another option worth exploring is short-term layoffs or job sharing (where two people share one role), which can be an effective alternative during difficult times.

Employers should explore all possible alternatives before proceeding with redundancy. Doing so is also helpful if an employee or their representative challenges the fairness of the process, as this can demonstrate that all reasonable steps have been considered to avoid the situation

Consultation

Once all reasonable alternatives to avoid redundancy have been explored, employees at risk of redundancy will be informed.

The manner in which the news is delivered to staff should be respectful and compliant with employment law.

Over the years, we have seen numerous examples where staff were informed of job losses via text or video message.

One of the most high-profile cases was P&O Ferries, which informed 800 staff members during a Zoom call that they were being made redundant with immediate effect (4) [cited 16.9.25] .

Once redundancy is being considered, an employer must make affected employees aware of the situation and start consultation (5) [cited 16.9.25] . It should mean that meaningful discussions take place with staff and their representatives, about what is happening, why it is happening, and the impact it will have on them.

There are two types of consultation:

• Individual consultation, which is for fewer than 20 redundancies.
• Collective consultation that is for 20 or more redundancies within 90 days.

There are several important things that must be addressed during the consultation process.

The reasons for redundancy should be made explicitly clear, as should the details of the process being undertaken.

During consultation, employees must be given the opportunity to express their views, comment on any proposals, and put forward reasonable suggestions or alternatives, which the employer should genuinely consider.

Consultation should always be meaningful and not merely a procedural exercise designed to give the impression of fairness. It is an opportunity for all parties to work together in an effort to avoid job losses.

Selecting who will be made redundant

The two most common types of redundancy are voluntary and compulsory.

Voluntary redundancy is where an employee willingly chooses to leave once informed their job is at risk.

Compulsory redundancy is when an employer selects who will be made redundant and must use a fair method to do so. This is known as a selection process, which ACAS says  should be based on clear, objective criteria, such as (6) [cited 16.9.25] :

• Skills and qualifications.
• Performance and attendance.
• Length of service (if appropriate).
• Disciplinary record.

Employers must not select someone for redundancy based purely on a protected characteristic e.g. age, pregnancy, race, disability etc, as doing so would not only be unfair but discriminatory and breach the Equality Act 2010 (7) [cited 16.9.25] 

Alternative roles

Employees at risk of redundancy should be offered any suitable alternative role, which matches their skills and experience.

If more than one employee at risk is suitable for an available alternative role, a fair selection process should be carried out to determine who will be offered the position.

If an alternative role is accepted, the employee will generally be entitled to a four-week trial period to assess whether the role is a good fit.

There is a risk that an employee may lose their entitlement to redundancy pay if they refuse a suitable alternative role without a valid reason.

If selected for redundancy

Those selected should be given proper notice. Length of service minimum notice period:

Employees who have two years or more service are usually entitled to statutory redundancy pay (8) [cited 16.9.25] . Some employers do offer an enhanced redundancy payment, which is more generous than the legal minimum. However, this will depend on either the employer’s policy or contract of employment.

Can I challenge a decision to make me redundant?

You have the right to appeal the redundancy decision if you believe it is unfair. You should do so in writing setting out your grounds for appeal.

Signs the process is unfair

Typical signs the process is unjust include that there is no legitimate reason for redundancy, consultation has not been carried out properly, the process is rushed or unreasonable, the selection criteria are unfair or there is evidence of discrimination.

If any of these issues are evident in a redundancy process an employee could have grounds for a legal claim against an employer.

Finally

A redundancy process is difficult for everyone involved and is never easy, but when conducted in a fair and lawful manner, it protects both employers and employees and helps avoid potentially costly and stressful legal disputes.