This guide is for use in circumstances where collective consultation is not required, as nineteen or fewer redundancies are anticipated. Here is an article on collective consultation, if you require information on this, otherwise, below are further details about the individual redundancy consultation process.
What process should I follow?
Whilst there is no statutory process required to be followed for individual redundancies, it is crucial that you check your employee’s contracts of employment and your redundancy policy. Any redundancy process or guidelines as to how redundancy will be carried out by your business, set out in those documents, should be followed.
If you do not have a redundancy policy or guidance in your employee contracts, best practice to minimise risk of unfair dismissal claims would include the following steps:
- Initial individual redundancy consultation meeting or announcement – this would typically be a meeting in person or online with all at risk and affected employees. Affected employees includes those who are impacted by proposed changes, but not directly at risk of redundancy themselves.
- Confirm in writing – this will be a short letter or email confirming the content of the initial meeting and providing the contact details of the individual or team coordinating the redundancy process in case staff have any initial questions.
- Individual meeting with at risk employees – generally follows and will provide further detail on:
- why that particular employee has been included in ‘the pool’ of ‘at risk’ employees;
- updated timelines relating to the redundancy process;
- what the redundancy package will look like;
- deadlines for making applications for voluntary redundancies; and
- how, and when employees will have the opportunity to ask questions and give opinions on ways to avoid redundancies, the proposed ‘pool’, selection criteria and feedback on scoring.
You might choose to pause the redundancy process after this stage, whilst any voluntary redundancies and early ideas to avoid redundancies and alternative suitable employment are considered. These deliberations could avoid or reduce the need for compulsory redundancies if for example there are sufficient suitable voluntary redundancy applicants, or if sufficient job shares or reduced hours have been arranged.
A pause to the process may also be helpful if there are particular issues raised with the pool or selection criteria or if there are questions which require a longer response or other suggestions to thoroughly consider. If needed, there should be further individual consultation meetings to discuss and document any additional considerations.
Minutes of meetings should be recorded in writing and sent to employees as soon as possible after the meeting and accurately reflect everything discussed. Preferably you should seek confirmation in writing from the employee that the minutes are accurate.
- Apply selection criteria – once initial considerations have been dealt with and if compulsory redundancies are still required, the next step is to score the ‘at risk’ employees against the selection criteria. The selection criteria will ideally have been agreed in advance and must be fair and applied in a consistent and non-discriminatory manner. Further information about fair selection for redundancy can be found here.
- Meet again with employees to discuss if they have been selected for redundancy – another individual meeting should be held with employees to explain the outcome of the selection process. If employees have not been selected for redundancy this should be made clear and confirmed in writing. If an employee has been selected for redundancy, this should be handled sensitively, and the employee should be given the opportunity to challenge their selection. You will want to reflect on the redundancy process up to this point, including looking again at whether there is alternative employment available in your business. If there is nothing further to consider or resolve, you will need to outline the following to the selected employees:
- the redundancy payment calculation;
- how and when notice will be given to terminate the employee’s contract; and
- the right the employee has to paid and unpaid time off to look for alternative employment outside of your business, whilst you continue to search for alternatives within the business until their end date of employment.
This final consultation meeting is an opportunity for you to summarise the redundancy process and the decisions you have made and answer any unresolved questions the employee has.
- Final dismissal meeting – there will then usually follow a final, short, formal meeting where if no alternatives to redundancy have been found and if any grievances have been resolved, an employee’s dismissal will be confirmed. It is wise to allow the employee to have the option of being accompanied at the meeting by a Trade Union Representative or colleague, in the same way as they might in the case of a grievance or disciplinary meeting. Again, minutes of the meeting should be taken and circulated after the meeting, preferably for agreement by the employee. Final details of the redundancy such as the employee’s notice, whether this will be served at work, on garden leave or paid in lieu, pay that will be received and the timings involved, should be confirmed to the employee. The employee should be given the opportunity to again raise any final questions they may have.
- Confirm dismissal in writing – as soon as possible after the final meeting, the employee should be issued with a letter confirming:
- their notice period;
- the date their employment will end;
- the redundancy payment they will receive and how it has been calculated;
- additional pay they will receive and when the payments will be made; and
- the employee’s right to appeal their dismissal and how they can exercise that right.
An employee’s right to appeal against their dismissal is separate from the redundancy process but should form part of your redundancy procedure or your business’ dismissal procedure.
- Appeal meeting – If an employee has chosen to appeal their dismissal, a meeting should beheld promptly and in accordance with your business’ procedure. Although not required for redundancy, if you act in accordance with the ACAS Code of Practice on Disciplinary and Grievance Procedures, this will be a good guide on best practice and mean less risk of liability for unfair dismissal. Employees should be given the option to be accompanied to the appeal meeting by a colleague or Trade Union Representative. Confirmation of your decision on the appeal should be provided in writing within a reasonable period, again, in line with any redundancy procedure your business has in place.
- Settlement agreement – you may consider a settlement agreement as an option, not only for voluntary redundancies, but for compulsory redundancies as an alternative to running a complete redundancy process or if there is a complaint by the employee, or potential claims for settlement. If you are considering this option, it is advisable to seek legal advice first, in order to assess your potential liability and ensure this is carefully managed and does not lead to a claim for constructive unfair dismissal. Our employment lawyers are highly experienced in this area and would be happy to discuss your business’ specific requirements with you.
Do I need to follow a redundancy process?
As already mentioned, there is not a specific statutory process to follow in the case of individual redundancies. If there is a contractual policy this must be followed to avoid a breach of contract claim, but if there is no written policy already agreed, you do have a choice over how you handle redundancies. However, to avoid unfair dismissal, amongst other claims, you will need to prove that a redundancy is for a fair reason and the individual made redundant was dismissed in a fair way and that you acted reasonably in arriving at the decision to dismiss that employee, in the circumstances. If you do not follow a defined process, the likelihood of consistent and fair redundancies where reasonable actions and judgments are made, is less likely. If you are careful to follow a meaningful individual consultation process, and this is properly documented, it will be easier to show that you acted reasonably in coming to your decision to dismiss on the grounds of redundancy.
Having a comprehensive and clearly defined process which you communicate to staff from the outset will save your business time and money as it is less likely to lead to time spent dealing with employee questions and grievances about the redundancy process, timescales will be more defined and mistakes by those running the process will be less likely. Involving employees in devising the selection criteria and allowing them to feed back on their individual scores, ask questions throughout the process, suggest alternatives to redundancy and be accompanied to meetings, will significantly reduce the risk of unfairness in your redundancy process and so the risk of liability and wasted resources spent defending employment claims. Therefore, whilst a redundancy process is not required to be followed, unless there is a valid settlement agreement in place, your business is likely to be risking grievances and Employment Tribunal Claims if it does not follow a consistent, comprehensive, and fair redundancy process.
Individual redundancies are not governed by a statutory procedure, however, to prevent claims for breach of contract, unfair dismissal and perhaps also discrimination, the process will need to be fair and will be more demonstrably fair if you are clear about what will need to be achieved and how this will fairly be achieved in a consistent manner, from the outset. If you do not yet have a redundancy procedure, would like your redundancy procedure updating, or if you would like advice on any aspect of running an individual redundancy process, our expert employment solicitors can help.