MS writes: My business is struggling and I have to make a number of
employees redundant. What do I need to do to minimise the impact on both my
workforce and the business?
When redundancies have to be considered, you have a legal obligation to inform
employees, trade unions and employee representatives at an early stage so
that those who may be affected have time to assess the situation and
consider their options. Sometimes this has to be done in accordance with a
strict timetable, writes Peter Done, managing director of Peninsula.
You must consult any workers who will be affected by redundancy. During this
consultation, alternatives to redundancy should be explored, such as
short-time working, pay cuts, retraining, unpaid overtime and so on.
You could also consider asking people to volunteer for redundancy, or asking
workers if they want to retire early. Volunteers may resolve the problem
but, if redundancies have to be compulsory, you should refer to any policy
or past practice before deciding the criteria to be applied in selecting
people to be made redundant. These can be applied to your workers in the
form of a “score”. Selection criteria must be as objective as possible and
non-discriminatory, and you should have clear evidence to support the scores
given to employees.
You should meet face-to-face with any employees who are selected for
redundancy to show them their score and to investigate any disagreements
with it. It could be, for instance, that a worker has skills and potential
that the employer is not aware of because the worker has never been called
on to use them. These discussions should be confirmed in writing.
I would recommend you seek professional advice before proceeding with any
dismissals and remember that statutory dismissal procedures must be followed
before any termination of employment.
Kingston Smith LLP, the chartered accountant, and Peninsula, the
employment-law firm, can advise owner-managers on their problems.
Send questions to The Business Doctor, The Sunday Times, 1 Pennington
Street, London E98 1ST, or fax to 020 7782 5765. Advice is given without
legal responsibility.
