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Managing Redundancies

For the first time in almost 20 years, many businesses are finding themselves with a new HR headache - letting people go, rather than struggling to hire enough of them. For many managers making people redundant is a new and unwelcome experience - almost as emotionally difficult for the manager as the employee. In smaller businesses without an HR department to undertake the task for them, managing redundancies can be even harder.

Jane Caven, Director Sagegreen HR Outsourcing, gives her essential tips for managing redundancies and keeping the remaining team motivated.

1. Plan of Action - You need to write a plan of action, setting out who you are considering and why. The plan needs to include target dates for each of the key steps.

2. Warning - You then need to give warning to employees that you are considering making redundancies and why it is necessary.

3. Statutory Duties - You need to check if you have a statutory duty under section 188 of TULR (C) A 1992 to consult appropriate employee representatives. If you do, you must allow a minimum of 30 days consultation. Even if there is no statutory duty, you may consider consultation anyway.

4. Formal Notification - If 20 or more employees are being made redundant, you need to give formal notification to the Department for Buisness, Enterprise and Regulatory Reform, using form HR1, a copy also goes to the employee.

5. Consultation - The aim of consultation is for you to reach agreement on ways of avoiding, or otherwise, such redundancies and to mitigate the consequences of the dismissals. The things to consider are: alternatives to redundancies such as shorter working hours, reduced overtime, reducing sub-contractors, work-sharing, voluntary redundancies including early retirement, transfers, re-training and wage reductions. If redundancies are unavoidable, then you need to draw up objective criteria for the job roles selected.

6. Final Selection - Before final selection is made you must consult with individuals, even if you have had collective consultation earlier in the process. You must write to the employees inviting them to a meeting to discuss the potential redundancy. They are entitled to have a representative, official or otherwise, attend the meeting with them. You must consider the representations that are made to you.

7. Write - If redundancy is the only final option, then you must write to your employees and set out their entitlements, including redundancy payment, pay in lieu, holiday pay. The employee may also have a right to appeal, which must be pointed out. You need to remember that investigations into alternatives to the redundancy must continue right up until the time the employement is terminated.

8. Consider the Notice Requirement - You also need to consider if the employee should work his or her notice period or not. Consider both the employees affected and the impact on the whole team .

9. Handle the Emotion - Employees will react in different ways; they may stay completely silent, be difficult, argue or cry. You need to stay calm whatever the reaction, show you understand, and give them time to respond. Keep a box of tissues handy and let them compose themselves before continuing.

10. Motivate those Remaining- The remaining team needs to feel motivated, valued and in control. They need time to adjust to the situation and people will respond at different paces -show you understand and be prepared to listen. Be constructive and share information in a constructive way. Understand their anxieties and where you can, remove their fears. Above all take time for your remaining team - they are the bedrock of your future business.

Sagegreen can offer advice and support during the re-structuring process. Please call 01606 333677 for an initial discussion.

Whilst every care has been taken in compiling this article, Sagegreen cannot be held responsible for any errors or missions; the notes are not intended as a substitue for legal advice.

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