redundancy and business reorganisation
During this difficult time businesses are facing huge challenges and inevitably may have to lose staff through business reorganisation or redundancy. We recognise this can be a stressful and difficult time for all involved and a well-planned redundancy programme will help to minimise the impact on the workforce, which in turn will limit disruption to your business.
What is a fair redundancy?
For the purposes of an entitlement to a statutory redundancy payment and a fair dismissal an employee is dismissed by reason of redundancy if:
- the employer ceases carrying on the business in which the employee worked;
- the employer ceases carrying on the business in the place in which the employee worker; or
- the business needs fewer people to carry out the work of a particular kind.
Prior to any dismissal an employer should consult with employees; if 20 or more employees are being made redundant in one establishment then it will trigger collective consultation and will require a minimum consultation period of 30 days (45 days where 100 or more employees are being made redundant) and imposes a statutory obligation to:
- Inform Trade Union (when recognised) Representatives and/or elected Employee Representatives prescribed information including the reasons for the proposals, the number of proposed redundancies, the method of selection and procedure and the method of calculating redundancy payments;
- Consult to see if there are ways to avoid redundancies, reduce the number of employees who need to be dismissed and mitigating the consequences of the dismissals;
- Notify Secretary of State in the Department for Business, Energy and Industrial Strategy (BEIS) with the prescribed HR1 Form before consultation with the appropriate representatives starts.
A failure to comply with the statutory obligations may result in an employment tribunal ordering the employer to pay a protective award to the affected employees and, in the case of failing to submit the HR1 form is a criminal offence for which the Secretary of State (or civil servant acting as him or other properly authorised officer) may institute summary proceedings. Conviction may result in liability for an unlimited fine.
A failure to carry out a fair consultation process or collective consultation may result in an unfair dismissal claim.
Upon termination employees are entitled to contractual notice pay, accrued holiday pay and, for those with over 2 years continuous service a statutory redundancy payment.
How we can help?
Our Employment Lawyers can guide you through the process and the steps necessary to comply with your legal obligations – working on a practical level and advising you on how best to make changes in a fair and effective manner. This includes:
- Preparing the timetable to ensure proper consultation with employees
- Drafting any formal letters
- Advising on selection pools/criteria
- Advising on redundancy payments
- Assisting in any appeal process
If you would like to discuss your plans or have any questions in respect of this then please do contact Paula Stuart on 01908 689345 or Stuart Snelson on 01908 689318 who can explore the options with you and guide you through the process.
What our client’s say:
“It is a pleasure to work with a lawyer who answers the questions asked, makes practical and relevent suggestions and is cost conscious.”
Christine Simpson, European Counsel, Mentor Graphics
To see more client testimonials please click here
The Employment Team
Stuart Snelson Partner
Employment 01908 689318Stuart is Head of the Employment Department and has over 20 years’ experience advising on all aspects of employment and pensions law. His partner led service provides practical and commercially focused advice to a wide range of local, national and international clients on the whole range of work related matters.
Paula Stuart Partner
Employment 01908 689345Paula has over 20 years’ experience practising employment law and provides clear and practical advice to all clients in all aspects of employment matters. Paula also delivers bespoke seminars to clients to meet their specific training needs. Recent courses include ‘The Essentials of Employment Law’ and ‘Best Practice when Managing Redundancies’