The Key to Running A Successful Redundancy Exercise

26th Feb 2021
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Perhaps your customer base has contracted, you have cash-flow issues, or you need to close an underperforming branch.  Unfortunately, redundancies are sometimes necessary.  Even more unfortunately, the process can be deeply challenging and inordinately time consuming.

A poorly-run redundancy exercise can not only expose your business to legal risk, but it can also severely harm your workforce’s morale and productivity. In some cases, it can take a bad situation and make it worse. 

This guide will cover some basic rules of thumb to help you make sure you’re on track.

Before You Start

Decide exactly why redundancies may be necessary.  Maybe you can avoid running a redundancy exercise at all, for example by making savings elsewhere.  Even if the exercise is inevitable, taking this first step will help you run it smoothly.

Prepare

The first thing to do is organise your workforce into groups or ‘pools’.  This will help you understand who may be at risk of redundancy and potentially how many redundancies may be necessary.

When organising your workforce, you may find that an employee is in a pool of 1.  That is, there is only 1 person performing that role without an equivalent in other teams or departments.  In this case, you can’t sensibly run a selection exercise as there is no other employee to compare. However, these situations are relatively rare and you should make sure that any ‘individual pools’ are genuine to avoid potential issues down the line.

Next, you will need a good plan, including when consultations will take place and who will lead them.  The timeline should be agreed and template letters should be completed.  Consultation leads should be clear on their role and what they will need to cover during meetings. 

On the subject of meetings, normally, these meetings should be face to face.  Where this is not possible, for example during the current Covid-19 pandemic, it may be reasonable to hold meetings remotely using online conferencing facilities.  If you decide to hold meetings remotely, you should consider whether all of the employees have appropriate internet connections and the computer literacy to easily access the consultations.  You may need to be flexible with some employees, but it’s better to prepare for this from the start. 

This is also a good time to prepare draft scoring sheets, even though the scoring criteria may change when staff are eventually consulted.  The more you can do now, the smoother the process will run.

Communicate

As with any relationships, clear communication with your staff is vitally important. 

Announce the redundancy exercise to all staff, including those who are not in an at-risk group.  Tell them why the redundancy process is necessary.  Clarify that all potentially affected staff will be contacted separately, ideally giving a timeframe.

Follow up by writing to all potentially affected staff to invite them to their first consultation meeting, informing them which pool they’re in and potentially how many jobs may be lost in that pool.

If you need to make changes to your process, inform affected staff sooner rather than later. Inconsistent messages can undermine your process and hurt staff morale.  Likewise, good communication can help engender trust.

Be Fair

Once the process starts, your staff can show wildly different attitudes.  It can be tempting to have a quiet word with a member of staff who seems to be taking things badly.  It can be extremely tempting to say ‘you don’t need to worry so much’ if the member of staff in question scores highly and won’t, in reality, be at risk of redundancy.

Don’t do this.

It may seem cruel to make someone struggle through a redundancy process that may last several weeks, but nothing will undermine the process more quickly than the appearance of favouritism. 

This also applies to the temptation to suggest to a poorly-performing employee that they update their CV and consider their options.

In general, it’s very unlikely that ‘quiet words’ will remain quiet for very long.

Instead, you should draw an employee’s attention to the agreed objective selection criteria and make clear that all potentially affected employees are being assessed against them, with no particular outcomes prejudged.

Keep Records

You will need to write letters (or emails) before meetings, and letters to support any post-meeting actions you decide to take.  You will also need notes of consultation meetings.

But more than that, you should try to put everything in writing that you (reasonably) can, including timelines and notes of meetings before the redundancy consultation was announced.  Make sure your consultation leads take detailed notes of all consultation meetings including times and dates.  This will help keep the process on track, and provide evidence in case a former member of staff takes legal action against you. 

In General

The likelihood is that your entire workforce will find the redundancy process stressful, regardless of whether they’re directly involved or not.  Similarly, your consultation leads may need some moral support, particularly if they’re consulting with people they’ve known for years. 

In general, then, the rules of running a redundancy are not overly prescriptive.  You have some freedom to design the process in line with the needs and capabilities of your business as long as you don’t stray from the principles of reasonableness and fairness. 

Some disruption is inevitable, but by having a strong process and sticking to it, by being clear with your staff and treating them fairly, you should find the impact on the business much less severe.

Lastly: Don’t Panic! The Guild is here to help.  If you would like to know more, please get in contact.

The content of this article is for guidance only and shall not constitute advice. Please seek independent advice or contact The Guild for information about its services.

The Guild 2021