As an employer do you need help with understanding the law on making employees redundant? ACAS recently published a very helpful checklist that covers the main issues.
It will also be of use to employees placed “at risk” of redundancy if they are in doubt about the fairness of the procedures used.
The checklist is not a magic bullet to be slavishly followed, and any employer thinking of restructuring their business should take legal advice on their own particular situation. For instance, the first section entitled “Is there an alternative?” suggests short-term working or temporary lay-offs. It could also have mentioned asking employees to take unpaid holidays, reduce bonus/commission payments or even salary reductions. Those are all possible alternatives to redundancy, but they could also land an employer on the wrong end of a breach of contract claim. It does highlight the point that redundancy should be a last resort, not the first port of call.
There is a reminder about the need to follow the correct redundancy procedures, if the employer has one. If not, there is still a duty to inform and consult with employees. The selection criteria to be used must be fair and objective and, in larger companies, should be agreed with employee representatives. ACAS gives examples of possible criteria, such as disciplinary records, skills or experience, standard of work performance and aptitude for work. Selection criteria do not have to be objective (and it is very hard to keep any sort of subjective analysis out of the selection process anyway), but what is important is that the criteria is applied fairly.
ACAS suggest that attendance records be taken into account, but in my view care should be taken with using that criterion, in case a disabled person is adversely impacted. Any disability related absences should be discounted from the selection matrix.
Finally, the checklist provides a reminder to get the selection pool right. If a person is selected for redundancy, but there are other people in the organisation to whom the same circumstances apply but are not at risk, a claim for unfair dismissal and/or discrimination may arise.In a nutshell, redundancy dismissal is about making a role redundant, not an individual person.
The checklist is a useful starting point, in as far as it goes. Don’t rely on it completely without taking specific advice though.