Making people redundant is a management reaction to a change in the circumstances of a business. Perhaps the business is relocating or the type of business in which the people are employed is no longer required. Or the business is going though change and needs different skills and knowledge in particular roles. Whatever the reason for the change, redundancy management must start with a valid business case.
A poorly thought out business case is the first thing to be challenged by counsel for an aggrieved employee at tribunal when looking to destroy any management defence.
It’s always easier to take action when there is a plan, and a process. Managing redundancy is no different. It’s likely that a redundancy will be judged automatically flawed without a process that embeds the legal requirements related to redundancy dismissal. It’s important to develop a policy before it needs to be used. It’s much easier then to be rational and to ensure the redundancy policy is fit for purpose.
It’s great having a redundancy policy and a process, but managers need to know how to use the process.
The activities during redundancy are very emotive. If managers are not properly trained they can inadvertently make mistakes that can cost the company financially and adversely affect staff motivation and performance. Any manager involved in the redundancy process must be trained in all aspects of the process.
Once the redundant employees leave, that’s not the end. Those remaining need to be managed. There will be lots of negative thoughts. People will wonder when the next cut is going to occur. Others will be concerned about their increased workload. And some will wonder why they survived the redundancies. Managers must actively manage this period – it may take months for life to return to ‘normal’!
There is much to consider when making people redundant. The legal requirements placed on organisations are set by the number of employees likely to be affected. If this is not correctly managed the process is likely to be judged unfair from the outset. Not only does the process need to be managed correctly but the redundancy payments must also be calculated correctly. Where employees are eligible, there are statutory payments to be made. The whole process must be managed in a fair and equitable manner. If this does not happen then successful tribunal claims against the firm are likely to ensue.
Developing Selection Criteria
It is the role that is being made redundant and not the person. Where more than one person is employed in the same role they all need to be assessed against relevant criteria. Developing the correct selection criteria, and assessing employees against them, is fundamental to the whole process.
Objectivity is key.
Consultation is not about meeting with an employee and telling them they are to be made redundant. That’s information giving – at it’s worst! Consultation is about discussing with employees and then coming to a decision based on all the information available. TimelessTime has worked with clients where robust consultation processes have resulted in less compulsory redundancies.
In some cases staff volunteered for redundancy and in others, staff made suggestions that meant fewer employees needed to leave. Good consultation mitigates claims in the event that employees decide to invoke tribunal claims.
Supporting Those Leaving
When people leave an organisation through redundancy they are not usually prepared for the transition.
TimelessTime consultants assist clients by managing an outplacement programme, working with redundant staff to prepare them for entry into the job market and ultimately into a new job.
Our consultants offer a range of assistance based on the needs of clients. Where clients have a good understanding of redundancy management, managers can access template documents and check actions with us as they progress. For others, a TimelessTime consultant can provide a more hands-on approach, managing the whole process with the designated client manager.
Consultant and manager then work through the process from development of the business case thought to provision of outplacement services.