Where staff redundancies are necessary it is essential that the correct procedures are followed. If they are not, a claim for unfair dismissal to an employment tribunal may follow (e.g. claiming unfair selection for redundancy). This can result in:
- Financial penalty - the compensatory award limit is now £74,200
- Adverse Publicity.
- Unnecessary Time Wasted.
Where fewer than 20 redundancies are to take place the correct procedures include the following:
- Decide on the number of employees to be made redundant.
- Invite volunteers for redundancy.
- Consider whether alternative jobs are available within the company.
- Establish an objective criteria for selection for redundancy.
- Apply the criteria for selection.
- Select employees.
- Inform employees as soon as possible of their provisional redundancy.
- Consult with individuals before a final decision is taken.
- Allow time off to look for other employment.
- Follow a proper dismissal procedure including offering a right of appeal.
Where 20 or more employees are to be made redundant there are detailed statutory provisions to be followed including consultation and notification requirements. Failure to follow these provisions may result in an employee, their representative or a trade union applying to an employment tribunal for a “Protective Award”.
Where a Protective Award is made employees are entitled to be paid for a specified period which can be up to 90 days.