Redundancy and Restructuring Advice for Employers
If there are changes needed to the structure of your business, it is critical that the correct redundancy process is used and that it is carried out fairly. Specialist employment law advice before you start the redundancy process is strongly recommended.
What is redundancy?
In employment law redundancy has a specific definition and a genuine redundancy will involve:
- Your entire business closing;
- Closure of a particular site or sites; and/or
- Less requirement for a particular type of work to be carried out by employees.
There are many reasons why redundancies may be required in your business, for example:
- Changes to what products or services you provide;
- Pressures external to your business which make the size or structure of your business economically less viable;
- Technological change which change what you require employees to do or the amount of employee’s you require;
- Changes to the location of your business.
You are free to make reasoned business decisions and employment law does not prevent this. If there is a genuine business reason for changes that have the effect of reducing your headcount, this is likely to qualify as a genuine redundancy and provided you follow a fair, consistent and non-discriminatory redundancy process you are lawfully able to operate a more efficient business with reduced employment costs.
‘Restructuring’ or ‘reorganisation’ may lead to redundancy if there is a reduction in employees as per the above, but restructuring does not necessarily have to lead to redundancies, you could just be using a different structure with the same headcount to see if it functions more productively.
How can we help you with redundancies and restructuring?
- Drafting a clear, comprehensive and fully compliant redundancy policy –there is not a statutory process for redundancy, under the ACAS Code of Practice, but a redundancy policy must still be carried out fairly and a clear and easy to follow policy makes this easier. If you do not have a written policy or would like this to be reviewed or updated, we can help with this.
- Guidance on the redundancy process– implementing a well-drafted redundancy policy so that the procedure is followed precisely is critical to its true fairness. We can help you avoid unfair dismissal claims by explaining the process in detail, in practical terms. We offer bespoke advice reflecting the specific circumstances of your redundancy or restructuring exercise.
- Collective Consultation – If you are expecting 20 or more redundancies to be made within 90 days at the same location, there are additional collective consultation duties which you must comply with and which we can guide your business through.
- Calculating redundancy payments – we can assist you with calculating contractual or statutory redundancy payments due to your employee.
- Redundancy meeting preparation– meetings to be held with employees throughout the process require preparation, we can draft letters of invitation, letters confirming risk of redundancy and finally confirming termination of employment, if required. We can also assist with questions you may have about pools for redundancy, selection criteria, how to consult with your employee and how to give them notice, if appropriate, at the end of the redundancy consultation, amongst other redundancy queries.
- Settlement Agreements – in attempt to reduce the length of or dispense with the redundancy process you might consider offering your employee(s) a settlement agreement. We can assist with drafting, advising and negotiating exit packages with employees and their solicitors.
- Employment Tribunal Claims – if your business is facing an Employment Tribunal Claim as a result of a redundancy exercise, we can assist you in defending the Claim.
Go back to: Employment Advice for Employers