How Do You Ensure a Fair Redundancy Process?

How Do You Ensure a Fair Redundancy Process?

Companies are constantly downsizing, rescaling to be more cost effective or closing down, which, unfortunately, means there are redundancies. Charlotte Gallagher, founder and managing director of P3 People Management, implores that, “Good communications between management and employees can often help an organisation get through the redundancy process with the minimum amount of pain.”

Charlotte continued: “Be aware that, although redundancy is a potentially fair reason for the dismissal of an employee, a dismissal may be held to be unfair if the employer fails to adopt a reasonable redundancy procedure, which includes identifying ways to minimise the number of redundancies required.”

“At P3 we follow a ten-step process to ensure redundancy is done right.”

Focusing on the key points of the process, Charlotte stated: “Firstly you need to ensure that there is a genuine need for redundancies. Section 139 of the Employment Rights Act 1996 outlines what reasons constitute dismissal by redundancy. Then you need to establish how many employees you propose to make redundant. Before considering numbers, review the business needs in reference to the business strategy and the processes that underpin the delivery of that strategy. Then you can determine what skills or roles are required in order to deliver the business processes.”

“Through verbal and written communication advise the employees of the potential redundancy situation and give them the opportunity of making suggestions and representations to avoid it. Make it clear that a final decision will not be made until the consultation process has been completed.”

“You can then invite employees to take voluntary redundancy, but you are under no obligation to accept such a request. Any such request should be considered in line with your business strategy.”

“When identifying the pool for selection, consider for inclusion; those employees who undertake the same or similar roles in all parts of the business, and employees of any associated companies who carry out the same or similar functions to the employees at risk of redundancy, among others.”

“Identify objective and reasonable criteria to be used to select from the pool(s) those who may be made redundant and apply them consistently and fairly. If there are other vacancies in the company, or any associated companies, ensure these are widely communicated to all employees at risk throughout the consultation process and up to and beyond the termination date if appropriate.”

Moving into the final steps, Charlotte added: “Individual consultation with each employee who is at risk of redundancy is a critical part of a fair redundancy process as this is the employee’s opportunity to ask questions and seek understanding. Also, employees who have been given notice of dismissal by reason of redundancy must be permitted a reasonable amount of paid time off work before the end of their notice to look for new employment.”

“Finally, it is important that the company continues to monitor the business situation during the notice period and communicate with the employees, who have been served notice of redundancy, accordingly. Don’t forget those staff who may be on garden leave – they are still employees and should be communicated with in the same way as if they were still working their notice period.”

P3’s team of HR consultants boast a collective experience of over 55 years. HR Aspects appreciates the contribution of their Managing Director, Charlotte Gallagher.

For more on fair redundancy processes and the ten-step process in-full, call P3 People Management on 0161 941 2426 or visit