Navigating the Difficult Decision of Redundancies: 3 Key Considerations for Employers

As an employer, redundancies are probably the last thing on this earth you want to have to do. It is both challenging and emotionally taxing. However, to guarantee your business’s survival and long-term prosperity it may be necessary. If you are considering redundancies, you must traverse a complicated mix of legal, moral, and practical issues. The process of making redundancies takes meticulous planning and execution, from determining which positions are crucial to your organisation to providing fair pay and support to the affected employees.

If you’re currently faced with the prospect of redundancies you’re in the right place! My intention today is to give you a thorough overview of how to handle layoffs in a considerable, equitable and legal manner.

Legal Considerations

You have to adhere to a number of regulatory obligations when making redundancies. These regulations must be followed so you avoid expensive legal battles or reputational damage:

• There should be a consultation period in which you discuss the impending redundancies with all of your employees. This should include people who are not at risk of being laid off but will nevertheless be impacted by the changes. If your intention is to make less than 20 employees redundant, there is no minimum time that the redundancy consultation must last for. However, if you intend to make between 20 and 99 employees redundant, there must be a minimum of 30 days between the start of the consultation process and the dismissal date for the chosen employees. If you intend to make more than 100 employees redundant, the consultation period must commence 45 days before any dismissals.
• When selecting employees for redundancy, you must be fair. If you’re laying off an entire team, or a particular group of employees, you must have a clear set of criteria by which the redundancy decision was made. The criteria should always be impartial and unaffected by subjective judgements.
• You must provide some type of redundancy compensation to your employees. Redundancy compensation amounts vary depending on your employee’s income, age and duration of employment. If possible, you should also offer severance pay or other support.
• An employee may file a claim with a labour tribunal or court if they feel they were laid off unfairly. To reduce the danger of unfair dismissal lawsuits, you must make sure the redundancy process is just, open and legal.

Ethical Considerations

Although layoffs are difficult, they don’t have to be unethical and cruel. If you sufficiently address the ethical implications that come with redundancies, you can improve the experience for your affected staff and hopefully maintain their respect. The ethical considerations of redundancies focus on treating your employees fairly and with respect. These are our top tips for ethical redundancies:

• Being honest is absolutely crucial. The weeks in the run-up to the layoffs are often characterised by fear and dread. Be forthright about the difficulties the company is facing, acknowledge the anxiety this environment’s uncertainty has caused, and steer clear of robotic or harsh-sounding language.
• You should cut your own pay first. Without also implementing significant, severe salary reductions at the executive level, you cannot legitimately conduct layoffs.
• Try to be as generous as possible with your redundancy pay or severance offerings. Whilst this comes with a significant cost, particularly as your business is already struggling, this is the right thing to do for those who gave their all to your business during prosperous times. It will also protect you from reputational damage.

Practical Considerations

You should also consider the practical considerations of implementing redundancies. The logistics of implementing redundancies, including employee communication, the supply of support and resources, and prospective redundancy alternatives, are the key practical considerations.

Concluding Thoughts

It is no secret that redundancies are difficult, both emotionally, logistically and legally. However, if you bare the key considerations outlined in this article in mind, it should be an easier process. If you want support with the redundancy process, please get in touch with us!