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Redundancy – Tips for getting it right

With a deep economic recession anticipated and the amendment & termination of the Coronavirus Job Retention Scheme for furloughed employees, many employers will, unfortunately, be contemplating redundancies.

Failure to follow a fair redundancy process can lead to claims from employees including unfair dismissal and failure to inform and consult. Redundancy processes can affect staff morale. It is therefore prudent for employers to ensure that a proper plan and process is in place if a firm decides that redundancies are necessary. Below are some tips for dealing with redundancies.

  • Timing & how many
  • Redundancies and redundancy consultation can take place whilst employees are furloughed. Consider carefully the reason why redundancies are being proposed whilst the furlough scheme still operates.
  • Where there is a proposal to dismiss 20-99 employees within a 90-day time frame, collective consultation must begin at least 30 days before the dismissal takes effect.  For 100+ employees this increases to 90 days (not 45 days as in GB).
  • If there are smaller batches of redundancies within the 90 day period this may trigger the collective consultation requirement. Generally, each batch is considered separately unless this is a deliberate attempt to avoid collective consultation requirements. The general rule only applies if consultation is already taking place in respect of the first batch, if consultation isn’t occurring, a second batch could trigger collective consultation in respect of both batches.
  • Unlike in GB, the expiry of fixed term contracts, during the 90 day period, have to be taken into account in calculating the number of employees the employer is proposing to dismiss for the purpose of the trigger for collective consultation.
  • Planning and timing is key. Consider how much time the business needs to commit to the consultation process. This will depend on the firm’s workplace culture as much as the law.
  • Consultation
  • Consultation, whether individual or collective needs to be meaningful, enabling the employees to comment on the proposals at an early stage.
  • Collective consultation is required with elected employee representatives or a trade union (if one is recognised). If employees are furloughed consider the practical arrangements that need to be put in place for election of representatives, consideration could be given to on-line voting with a third party.
  • If employees are furloughed consider the practical arrangements that need to be put in place for consultation. The statutory right to be accompanied to meetings applies. Consultation does not need to be face to face, video conferencing or phone calls can be substituted. It is useful to agree the format of that consultation at an early stage.
  • Prior to holding consultation meetings it can be useful to draw up information sheets, anticipating likely questions and answers. This can speed up the consultation process as well as making the process more transparent and ensuring managers give out consistent information.
  • The key word you need during consultation is “proposed. The consultation is meaningful and no decisions have been predetermined.
  • Who is in the pool?
  • Businesses have flexibility in choosing their selection pools, so long as they do this in a way that a reasonable employer would.
  • The key issue is the transferability of skills and experience. In some cases the pool of selection may be quite large, in other cases there may be a pool of one.
  •  The selection criteria
  • Selection criteria should be as objective as possible and fairly applied.
  • Ideally each criterion should be able to be verified by records such as performance appraisal and attendance. If no suitable HR data exists to back up scoring of criteria, businesses should do their best to evidence the reasoning for their scoring. Preferably more than one manager should be involved in impartially and independently scoring the criteria.
  • Consideration should be given as to whether criteria could be discriminatory and making adjustments, such as discounting disability related absences or ignoring maternity related sickness.
  • General
  • Individual redundancy processes must follow the statutory 3 step dismissal process, otherwise the dismissal is automatically unfair.
  • An HR1 form must be sent to the Department for the Economy NI if an employer is dismissing 20 or more employees at one establishment within a 90 day period. Failure to do this is a criminal offence.
  • Keep records of conversations and meetings (even informal ones).
  • Check and follow your own procedures and policies.
  • Check termination payments including redundancy payments, notice payments and holidays.
  • Provide a written record to the employee of the redundancy payment and how it has been calculated. Failure do to so is a criminal offence.

Should you require any further information or advice on dealing with specific issues (such as the above) or employment matters generally, please contact any member of the Employment Law Unit:-                              

Tel: 028 9024 5034

Copyright 2020 Elliott Duffy Garrett

Every care has been taken in the preparation of this bulletin; readers are advised however to seek legal advice in relation to specific issues.