Set out below is a brief checklist of matters which need to be considered to ensure that any redundancy process is fair. Please note however that the checklist is a guide only and is not a substitute for appropriate advice on any given proposal. 

A failure to comply with legislative requirements in relation to redundancy dismissals can lead to claims of unfair dismissal, breach of contract and discrimination. We would recommend that companies take legal advice before proceeding with downsizing plans, otherwise redundancies may not result in the hoped for cost savings but higher liabilities to meet employment claims.

Step 1

Establish whether there is a genuine redundancy situation.

• Is there a closure of the business for which the employee was employed?
• Is there a closure of the place of business where the employee was employed to work?
• Is there a reduced requirement for employees to carry out work of a particular kind?

Step 2 Establish how many redundancies are being proposed.

If 20 or more redundancies are being proposed in a 90-day period then the collective consultation obligations will arise and it will be necessary to notify the Secretary of State of the proposed redundancies (This note does not deal with collective consultation obligations). If collective consultation is required it will lengthen the process referred to below by between 30-90 days depending on numbers. A failure to comply can lead to penalties of up to 90 days pay per employee.

If fewer than 20 redundancies are being proposed then it will be necessary to follow the standard dismissal and disciplinary procedure (SDDP). Failure to follow the SDDP in relation to any employee would render their dismissal automatically unfair.  

Step 3 Consider the appropriate pool of employees and if selection will be necessary.

Step 4

Meet with all of the employees who might be made redundant (as a group) and explain the reasons for the potential redundancies. Explain how many jobs are at risk of being redundant (making sure it is clear that the redundancies are only a possibility at this stage) and explain that ways of avoiding the redundancies are being explored. You then need to ask the employees for suggestions of ways to avoid redundancies and consider asking for volunteers for redundancy.

Finally issue letters to staff inviting them to first individual meetings (comply with statutory   requirements including advising of reasons for proposals and right to be accompanied).

Step 5: Individual Consultation Process

This is likely to require three or four meetings taking place over a period of 4-6 weeks and letters inviting employees to meetings should be issued at every stage.

The first individual meeting should cover issues from the Group meeting on a one to one basis - do employees have other proposals that could avoid the need for redundancies? Do not make any decisions to proceed with redundancies until this meeting has been held and feedback from employees considered.

At the second individual meeting confirm proposals and discuss methods of selection and pools of affected staff.

You then need to score each member of staff.

At the third individual meeting confirm if the employee has been provisionally selected and discuss scores and any alternative positions available.

At the fourth individual meeting make it clear in writing that one outcome may be dismissal by reason of redundancy. This meeting should also include any final discussions regarding any alternative work.

Finally you need to serve notice in accordance with contractual and statutory requirements and offer a right of appeal.

Step 6: The right to appeal

This should be heard by an individual not previously involved in the redundancy process.

Practical hints:

• Take notes of all meetings
• Take copies of all letters
• Follow any appropriate internal and statutory procedures.
• Do not allow employees to be accompanied by legal advisors - colleagues and trade union representatives only.

For further information please contact Sara Barrett at George Davies LLP.  Email sarabarrett@georgedavies.co.uk. or telephone 0161 2348848. Disclaimer The content of this article does not constitute legal advice.  You should always consult a suitably qualified solicitor for professional advice about any specific legal matter of concern to you. George Davies Solicitors LLP, its partners and staff do not assume any responsibility for information contained within this article and disclaim all liability relating to such information.

George Davies Solicitors LLP

George Davies was highly rated, in the North West, in the 2008 Legal 500 review and in Chambers and Partners UK Directory.  They specialise in all aspects of commercial law and boast a specialist niche Construction team with experience in a full spectrum of construction law services.  The team was commended in the Legal 500 for its breadth of expertise, efficiency, and ability to provide specialist advice.  Chambers specifically mention its achievements in Construction. Catherine Kay can be contacted on 0161 234 8861 or emailed at catherinekay@georgedavies.co.uk. http://www.georgedavies.co.uk/