Buddy says: Firstly you should thoroughly assess the situation before deciding what to do. A temporary blip in the company’s workload may be managed by small changes such as ceasing overtime, redeploying staff elsewhere in the Company or suggesting reduced hours. You should be careful though, not to implement any changes without consulting with the workforce and explaining why these changes may be necessary.

You could find that employees are willing to consider small, temporary changes to their terms and conditions of employment if it means they still have a job at the end of the day. You should carefully explain the situation, stating that the changes are only necessary through the period of downturn and undertaking to keep employees informed should the situation change. Keeping employees informed will maintain their trust in you and should aid staff morale. 

Employment Tribunals will also look to see what reasonable steps an employer has taken to avoid or minimise redundancy, so any alternatives the redundancy that you have explored will be taken into account.

Employer information:  A true redundancy situation will arise when there is either a:

• Business closure
• Workplace closure
• Reduced requirement for employees

Once a redundancy situation has been identified, you will need to identify the correct pool of employees from which the person or persons who are to be made redundant will be selected. Factors that may be relevant in identifying the correct pool are whether: 

• Other groups of employees are doing similar work to the group from which selections were made
• Employees’ jobs are interchangeable

It is not always necessary to select from a pool if, for example, an employee carries out a unique role.

• Individual performance and ability – these should be capable of verification ideally by written records such as performance appraisals
• Attendance records – care should be taken not to take into account absence due to pregnancy related illness, maternity leave or family friendly leave. Similarly absence that is connected to a disability should also be discounted
• Last in first out – this should be used with caution.  For example, where females have had breaks to have children this should not be taken into account. Similarly, this criteria could amount to indirect age discrimination.  For these reasons, this criteria is seldom used in practice these days.

You should avoid any criteria which are opinion based such as a persons “fit” or their “attitude to work” as this will be too subjective to justify to a Tribunal.

Once the person or persons to be made redundant have been identified, it is important to consider alternative employment for potentially redundant employees. You are not obliged to create alternative employment where none exists, nor does the role need to be of an equivalent to the one that is being made redundant. If an employee accepts an offer of alternative work they are entitled to a statutory 4 week trial period to test the new employment.

If an employee is ultimately made redundant and has over 2 years service, s/he will be eligible for a redundancy payment, the amount of which will depend on the person’s age, length of service and pay.

For more information please see our range of articles and fact sheets on redundancy and seek legal advice if in doubt.