As the economic outlook becomes more difficult, many businesses will have to consider the possibility of making redundancies to reduce costs.
From an employment law perspective, the objective is to minimise the risk of claims for discrimination or unfair dismissal that often arise in this context.
There are three issues which encompass the main grounds on which employees may wish to challenge the fairness of redundancy at a tribunal.
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These issues are the genuineness of the redundancy process, the selection process for redundancy and the redundancy consultation process.
For the first issue, the good news for employers is that the Employment Tribunal is not generally concerned to challenge the merits of any decision to make redundancies.
The principle is that it is down to employers to decide how to organise their businesses and, if they wish to reorganise, they are entitled to do so.
It is often helpful for employers to prepare a before and after organisation plan, showing how the number of employees is to be diminished.
In terms of redundancy selection, there are, broadly speaking, two scenarios. Where a unique position is no longer required, there is no need to apply selection criteria.
The other scenario is where there are a number of employees doing interchangeable jobs and the number of employees is to be reduced.
Here the employer must show that they applied reasonably objective criteria for determining who would be made redundant.
In terms of consultation, there is an obligation to collectively consult with employees where 20 or more employees are being made redundant.
There is also an obligation to consult individually with employees to be made redundant - even if only one is involved.
Given the potential employment law difficulties surrounding redundancy, many employees are offered enhanced redundancy payments on the basis that they sign a settlement agreement.
This settlement agreement is known as a compromise agreement and it is a legal requirement that the employee receives independent legal advice.
As readers may appreciate from this short column, it is important for employers to seek legal advice on managing redundancy situations.
The Employment Law Team at Lemon & Co Solicitors specialise in this kind of work.
Contact Lauren Harkin at Lemon & Co on 01793 527141
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