Trying to ensure that a redundancy process is carried out correctly is difficult enough when business’ are operating as usual, but what process needs to be followed during the COVID-19 pandemic? Read our guide to make sure you follow the right procedure and download template redundancy letters to help you through the process.
- What process should employers follow when making redundancies?
- Consider if there is a genuine redundancy situation
- Put in place a written business case for the proposed redundancies and a timetable
- Consider the pool of those being selected for redundancy, selection criteria and any alternative vacancies
- First meeting
- At risk of redundancy letter - free template available
- Invite to first consultation letter - free template available
- First individual consultation meeting
- Follow up work and consultation letter
- Second individual consultation meeting
- Further consultation needed
- Letter of dismissal
- What modifications to the individual consultation process do employers need to look at during the COVID-19 pandemic?
- Downloadable template letters
What process should employers follow when making redundancies?
There is no a statutory process that employers must follow* (see footnote at the end of this guide), but employers should ensure that before making redundancies they follow a fair procedure and have made a fair and reasonable decision to make redundancies, in order to avoid claims for unfair dismissal.
It is advisable that employers follow these steps:
Consider if there is a genuine redundancy situation
This technically means that there is either a closure of the business or place of business where the employee worked or a reduced requirement for the kind of work the employee carries out. So, where there is a genuine redundancy situation:
Put in place a written business case for the proposed redundancies and a timetable
The business case document should set out why the business is proposing to make redundancies and how it is proposing to do so, identifying the area(s) of the business it is proposed will be impacted by the potential redundancies.
A timetable should also be put together setting out proposed timelines for the redundancy process, who is doing what, the necessary documentation for each stage, etc.
If you would like further assistance with drafting the business case document and timetable, please contact our specialist employment solicitors.
Consider the pool of those being selected for redundancy, selection criteria and any alternative vacancies
You will need to look at the likely number of redundancies that will be made. If there are 20 or more redundancies proposed within 90 days, then collective consultation will be required and the Secretary of State will need to be notified (see below).
In any event, regardless of the number of proposed redundancies, a fair procedure will need to be followed for each employee being placed at risk of redundancy.
The pool(s) of employees for redundancy will need to be carefully considered and should be made up of employees who perform the same or similar roles. Selection criteria (that are, where possible, objective) will need to be determined and scores against these criteria will be given to the at-risk employees in each pool, to decide who is provisionally selected for redundancy.
Sometimes unique roles may be identified as being at-risk, in which case there is no need for a scoring process, but their selection must still be justifiable with clear and valid business reasons.
All at-risk employees who are provisionally selected should have the opportunity to challenge their selection as part of the individual consultation process.
If there are any suitable alternative vacancies which the at-risk employees could perform you should make a list of those vacancies and make at-risk employees aware of them and the application procedure during the individual consultation process. If there are any at-risk employees who are pregnant, on maternity, adoption or shared parental leave you should take extra care, as different rules apply.
This should, where possible, be a group meeting either with all employees or just those that are at-risk of being made redundant. The meeting should cover:
- The reasons why redundancies may be required.
- How many redundancies may need to be made.
- An outline of the process and rough timelines.
- How you are trying to avoid compulsory redundancies by other cost-cutting measures such as freezing recruitment and pay rises and asking for volunteers for redundancy or early retirement.
This should be an early opportunity to explore if employees have any other ideas as to how redundancies can be reduced or avoided. You should try to expect and be ready to answer any questions employees may have about the process, including regarding pools, proposed selection criteria and scoring and the right to take time off to seek alternative employment.
It is critical that above all at this stage, it is made clear that employees are only being placed at-risk of redundancy. No final decisions have been made about redundancies, including exactly how many will be made and who will be made redundant. A clear note of the meeting should be taken.
At risk of redundancy letter - free template available
The employees who are at-risk of redundancy should all receive written confirmation of information received during the first meeting including any selection criteria and scoring guidelines.
A free template for this letter is available to download using the form at the end of this guide
Carry out a fair scoring process against the selection criteria. Preferably at least two managers rather than just one manager should carry out the scoring exercise, so that there is less of an opportunity for the employer to be accused of bias.
Invite to first consultation letter - free template available
A second letter should be sent to those employees who have been provisionally selected for redundancy, to invite them with reasonable notice to a first consultation meeting, where they can discuss and potentially challenge their provisional selection for redundancy. The employee should be given the option to bring a Trade Union Representative or colleague with them to the meeting and be reminded of the process so far. Again, it should be made clear to the employee that no final decisions have been made with regards to redundancy.
A free template for this letter is available to download using the form at the end of this guide
First individual consultation meeting
This should be held to allow the employee to have the opportunity to comment on their scores and more generally speak about the employer’s proposal to make them redundant. It will also allow the employer to explain a little bit more about why the employee has been selected, the process going forward if redundancy is confirmed and any suitable alternative roles plus how to apply for those.
Follow up work and consultation letter
After the first individual consultation meeting, the employer will need to consider any questions it needs to answer as a result of the meeting and any representations made about scores, pooling, selection criteria or suggestions for avoiding redundancy. Also, if there are redeployment opportunities within the company the details of these need to be provided.
If scoring changes as a result of representations made, the employee should be informed of this. If this makes a difference to the individuals being placed at risk of redundancy, relevant employees will need to be informed and the process started again with the new at-risk employee.
The employee should be provided with a follow-up letter summarising the content of the first individual consultation meeting.
If you would like further assistance with drafting this letter, please contact our specialist employment solicitors.
Second individual consultation meeting
If nothing has changed as a result of the first consultation and follow up work the employee should attend a further second individual consultation meeting to be advised that they have been selected for redundancy and what they are entitled to receive as a result. The employee should be given the opportunity to ask any questions and should be advised as to whether they will be expected to serve their notice, the arrangements for the end of their employment, and of the right to take time off to seek alternative employment. The employer should ensure it has a full note of the meeting.
Further consultation needed
In some cases after the second consultation meeting, there are still matters to be finalised that warrant a further consultation meeting, for example where redeployment is still a possibility or there are outstanding challenges to selection which need to determined. A final decision should only be made to confirm dismissal on grounds of redundancy where no further consultation is needed.
Letter of dismissal
Once the final individual consultation meeting has been held and the employee advised that they have been selected for redundancy, this should be confirmed to the employee in writing. This letter should include the Termination Date, calculation of redundancy payments and other end of employment details including offering an appeal to the employee advising of the deadline for this.
If you would like further assistance with drafting this final letter, please contact our specialist employment solicitors.
Employees made redundant should be given the change to appeal against this decision. Where an employee does appeal this does not not however need to delay the dismissal.
If an employee chooses to appeal the decision to make them redundant a further individual meeting should be held with the employee, who should be given the opportunity to be accompanied. The appeal meeting should preferably be chaired by somebody more senior than the manager who made undertook the redundancy process and made the decision to dismiss. If the appeal is successful, the redundancy would be overturned and the employee would be reinstated and paid for any loss of salary. If, however the appeal is rejected, the redundancy is confirmed.
After the meeting you should write to the employee to confirm the outcome of the appeal and make clear that this is the final internal decision on the issue.
If you would like further assistance with drafting this appeal letter, please contact our specialist employment solicitors.
What modifications to the individual consultation process do employers need to look at during the COVID-19 pandemic?
The redundancy consultation process should still be carried out fairly and thoroughly, following the above steps as closely as possible, with modifications being incorporated only where required. Indeed, more than ever now, where redundancies (or indeed any other dismissals) are made, it is important to get these right as the risk of claims is higher than usual.
Practically speaking, employers will need to be creative with consultation (individual and collective, where required) and whilst people may not be able to meet face to face for consultations, or (were required) nominated and elected as employee representatives face-to-face, this can all still be done electronically. How this can be achieved compliantly, using the facilities available to the business and affected employees, should be considered, with other practicalities.
If employees are currently working from home or are furloughed the process may be more difficult to carry out, particularly the first meeting in the redundancy process. Employers will need to think about how they can use technology to work through this issue, for example where there are a large number of people to communicate to each team could have a video call with the same scripted announcement being made at the same time,.
If the employees concerned do not have the facility to participate in a video call, conducting consultation meetings by telephone or in writing may have to be considered.
Employers should ensure that they have up-to-date contact details and can easily reach current employees before attempting to start the redundancy process.
If you have any specific questions about the redundancy process or how this can be adapted during the COVID-19 pandemic, please contact one of our specialist employment solicitors for support.
Downloadable template letters
To help you with this tricky process we have created templates of the first two letters you will need to use; an at risk of redundancy letter and an invitation to consultation letter. These can be downloaded by completing the form below.
Always take care when using template legal documents as each business will have its own circumstances that need to be taken into account. If in doubt, take legal advice from our employment solicitors.
Where it is proposed to make 20 or more redundancies at any one establishment in a 90-day period it is necessary to have collective consultation for at least 30 days (45 days where 100 or more redundancies are proposed). This consultation is in addition to the requirement to consult with individuals and requires employers to consult with appropriate representatives (trade union reps and/or employee reps) about the proposed redundancies.
With such large-scale redundancies, there are statutory notification requirements too. This notification of proposed redundancies should be by way of letter or form HR1 sent to the Secretary of State and copied to the employee representatives, at least 30 days before the first dismissal takes effect (the last date of the affected employee’s employment) if the employer is to dismiss 20-99 employees or within 90 days, or at least 45 days before where the employer is to dismiss at least 100 employees within 90 days.
For further information on collective consultation with employee representatives see our article on the collective consultation process, or get in touch with our employment solicitors for advice about making redundancies.