Tomorrow I am chairing the SBK Legal and Strategic Guide to Workforce Restructuring. It’s an all day conference with some very interesting speakers and covering a wide range of topics. Click here for details.
There will be presentations on how to vary contracts of employment, how to adjust pensions, a review of the government’s planned employment law review, how to maintain a positive working relationship with Unions, as well as a session on “Realising redundancy savings: abiding by the rules to avoid a later backlash”. The law on redundancy and procedure is particularly interesting to me and I will be especially looking forward to that session..
In the meantime my answer to the title question, pending tomorrow’s conference is: “with care”. Many appeals and Unfair Dismissal claims arise from employees who claim they have been unfairly selected for redundancy. How should employers who have identified the need to reduce headcount go about it?
Remember that roles are made redundant, not people. If it looks like a person has been selected for redundancy not because of the role they do but because of who they are, a complaint may be sure to follow. The maximum compensatory sum that a Claimant can be awarded by an Employment Tribunal is £68,400, plus a “basic award” based on length of service and age, currently £400 per week of service. However a person who is chosen for redundancy because of a discriminatory reason, aka a “protected characteristic” under the Equality Act 2010 may be able to bring a claim that has no cap.
In cases where a whole team or desk is being closed, or a layer of management is being stripped out, it can be much harder to argue unfair selection. It’s really only where there are, say, ten people performing a role and the employer wants to reduce that number to five, that selection processes need to be utilised to make sure the process is fair.
Selection criteria need to be as objective as possible – not always an easy task for an HR department tasked with drafting them – and must avoid any discriminatory factors. For instance, LIFO (Last In First Out) whilst being objective may also discriminate against employees on grounds of age, because the newest people may be the youngest, although clearly not in every case. Similarly, relying on attendance records may be unfair on disabled people if they have more time off sick. To minimise the risk of challenges disability-related absences should be factored out of the equation for redundancy selection purposes. Absence from work because of pregnancy or maternity related reasons should also be ignored, for obvious reasons.
In a sales team a good objective measurement might be the number of sales completed, but that is not always foolproof: an aggrieved employee might argue that they were given the worst accounts to maintain or they were hindered in some other way. Having said that it can be very difficult for an employee to make such an argument stick.
Regular appraisals properly conducted also can assist in the redundancy selection process, although I have my doubts about “performance reviews”. In many cases they just serve to de-motivate employees, but they do provide a historical record of how the employee has been working over a period of time and not just a snapshot at the point of termination.
What employers should try and avoid, if at all possible, is subjective criteria – soft skills are very hard to measure and has potential for an employee to claim that the person undertaking the assessment was either biased against them (their line manager for instance) or did not know them well enough to carry out an effective assessment (because the assessor was not their line manager).
As someone who regularly advises employees on redundancy selection issues, I would urge employers to try and be as objective as possible when making selection decisions. Seek volunteers as well, because then there is likely to be less chance of issues over selection arising.
It’s a minefield, but one that can be negotiated with proper preparation and forethought. Remember the Scout’s old motto: Be Prepared!
I don’t give advice (legal or otherwise) through this blog, but if you need help with any of the above issues please do contact me at Dale Langley & Co at firstname.lastname@example.org.