Dealing with redundancies and employment disputes in difficult times.

Release date: May 2009

Chris Wiper, Senior Partner at Close Thornton, looks at how businesses can deal with redundancy and employment disputes in the current economic climate.

Many employers are faced with a situation that they have never had to deal with before - the prospect of laying off staff or making redundancies.

Before embarking on the redundancy procedure, most employers will have considered the following options first:

  • Natural wastage
  • Restrictions on recruitment
  • Retraining or redeployment
  • Reduction or elimination of over-time
  • Introduction of short-time working or temporary lay-offs

However, if redundancy becomes the only way forward, it is important for employers to follow a standard dismissal procedure. Specifically, the employer must:

  • Write to the employee notifying them of the reason for redundancy and inviting them to meet to discuss it
  • Hold a meeting with the employee, who has a right to be accompanied.
  • Notify the employee of the decision and the right to appeal.
  • If the employee wishes to appeal, hold an appeal meeting at which the employee has a right to be accompanied.
  • Inform the employee of the final decision in writing.

In addition, any employee with more than two years of service is statutorily entitled to a lump sum from their employer. The amount can be calculated as follows:

  • 0.5 week's pay for each full year of service if the employee is less than 22 years old.
  • 1.0 week's pay for each full year of service for employees aged 22 - 40 years
  • 1.5 week's pay for each full year of service for employees aged 41 and over.
  • The maximum number of years of continuous service for redundancy purposes is 20 years.

When it comes to selecting staff for redundancy, there are always difficult decisions to be made. The most common selection criteria used include skills and experience, standard of work performance and staff disciplinary and attendance records.

It is clear that communication is a key factor in managing the redundancy process. In many ways, the sooner the business realities are communicated to employees the better. In the UK, employees have the right to be informed about their company's economic situation, about employment prospects and about any decisions which will lead to substantial changes in work organisation.

ACAS (www.acas.org.uk) provides advice on legal responsibilities, consultation periods and how to decide which employees to make redundant.

However, for specific advice on redundancy or employment related disputes in your business, please contact chris.wiper@close-thornton.co.uk or call 01325 466461.

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