What legal steps does an employer need to take?
If more than 20 jobs are being lost in a 90-day period, the employer has a legal requirement to inform the Department of Trade and Industry and to consult the staff. The minimum period of consultation is 30 days unless more than 100 jobs are being lost, in which case it is 90 days. Consultation must be with a staff representative, and where there is no obvious choice for this role the affected employees should elect one. Where unions are recognised, employers may consult with them instead.
What should happen in the consultation process?
The priority should be reducing the number of redundancies and finding new roles for staff within the company or its subsidiaries. The employer should consider reducing overtime, restricting recruitment, reducing contracted or temporary workers, giving employees early retirement and short-term or part-time work if possible. If jobs are found internally, employees are entitled to a four-week trial period in the new role to decide whether they want to keep it rather than taking the redundancy payments.
How should the consultations be conducted?
It is all about making a difficult process as open as possible and taking into account what employees and their representatives say. Announcements should be made jointly to staff affected by the situation, as well as in individual meetings. Employers should give the appropriate representatives the following in writing:
- the reasons for the redundancies
- any ways of avoiding redundancy
- the number and categories of workers affected
The most important thing to remember is that the position is redundant, not the person
- the selection criteria to be used
- the procedure to be followed
- the timetable for redundancies
- how pay-offs will be calculated.
What does an employer have to pay?
The firm is legally obligated to make payments to everyone who has been employed for more than two years. For employees aged over 41 the rate is one and a half week’s wages for each year they have worked for you. People aged between 22 and 40 are entitled to a week’s pay for every year and people aged 18 to 21 to half a week’s pay per year. The maximum weekly wage considered for redundancy payments is £230 and the firm only pays up to 20 years. Extra payments may be written into the contract.
What else can employers do to help?
Employees who have been at the same company for a while may find looking for another post difficult. The most important thing to remember is that the position is redundant, not the person. Employers might engage a firm of outplacement specialists, who can help with finding another position, or may provide counselling and workshops on CV and letter-writing skills. Employees being made redundant should be encouraged to use these facilities. The employer should also allow time off work to attend interviews or for retraining where necessary. They should be prepared to provide references, too, which should help in the search for another post.
