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Redundancy is an unfortunate necessity in practically every business sector. Despite all businesses best efforts to keep on staff, a downturn in fortune, company restructuring and changing business practices may mean that selecting candidates for redundancy simply must take place. In a small business, it’s likely that there will only be one employee in the management team’s thoughts. Clearly, this means that the process you use to select candidates for redundancy doesn’t have to be particularly thorough – it’ll be far easier to justify your choice if there’s only a single suitable employee to choose. However, in larger businesses, or businesses that employ individuals with similar or identical job titles, a more robust selection process must be undertaken.
Management must be able to justify their redundancy choices, showing that the decision was made based on an objective set of values – not an instinct, or on the basis of who you like the most. If an employee that you’ve made redundant decides to take legal action on the basis that their dismissal was unfair, you’ll have a long and expensive battle on your hands – surely something that you want to avoid during this difficult and challenging time for your company. To avoid accusations of unfair dismissal, or to at least ensure that you’ll quickly be able to deal with any legal challenge, it’s important to draw up a thorough and fair selection process.
When compiling a redundancy matrix, you must include a number of objective criteria. You can then weight these criteria based on what’s important to your company. Commonly used criteria include:
- Disciplinary record
- Attendance record
- Standard of work
- Qualifications and skills
Different levels of these criteria will be awarded points. For example, if an employee has had no disciplinary warnings, they might be awarded 10 points, a verbal warning might give them five points, and a written warning three points.
In addition to the above criteria, length of service is often included in the redundancy matrix. This criterion is controversial, because it is often a form of indirect age discrimination – favouring the older employees. Case law suggests that length of service remains an acceptable criterion for redundancy, provided it actually reflects the loyalty and experience of the employee, and that it is not the sole criterion used in the redundancy selection process.
If you don’t want to be accused of unfairly dismissing an employee, it’s best not to use any of these criteria:
- Trade union membership
- Pregnancy, maternity or paternity
- Participation in legal industrial action
- Age, sex, religion etc.
If there’s a new role up for grabs in your company similar to the role being lost, you must offer your candidates for redundancy a chance to apply for that role. Many redundancy matrices take into account the candidates’ performances at an interview. Although their performance may not be measured objectively, it may be used as a criterion in redundancy selection.
Finally, ensure that outplacement support is in place to ease the strain placed on workers that you’ve had to make redundant. Even the fairest redundancy selection process is likely to leave the selected individual(s) feeling slightly bitter towards their former employee. Outplacement support ensures that they’ll continue to hold their old company in high regard, despite the outcome of redundancy selection.
Whilst Renovo has a great deal of experience in assisting employers and individuals through redundancy, we would advise that you seek independent legal advice from a qualified practitioner if you are in any doubt as to your legal position.
Renovo is one of the UK’s leading providers of outplacement and career transition support. We work with both organisations and individuals to support all their career transition requirements. If you would like to understand how Renovo can help you please call 0800 612 2011 or email email@example.com