Redundancy

Before committing to redundancy, you should explore any other options. Is there a way to avoid making redundancies?

You should consider options such as stopping overtime, retraining staff for alternative roles reducing hours worked, implementing pay freezes, and stopping using casual labour. If redundancy is unavoidable, you should also consider asking for volunteers.

Consultation

Once you’ve established that redundancy is the only option, you will need to consult with staff, letting them know what’s happening and hearing their views. If you are making more than 20 employees redundant, you will need to carry out a group consultation.

Let staff know they are at risk

Identify which members of staff are at risk of redundancy and let them know. At this stage, you will need to carefully explain the redundancy process to them.

Choose staff for redundancy

Next, you’ll need to go through the at risk staff members and decide who will be made redundant. This must be done using a fair selection criteria, usually taking the following into account:

• Skills, qualifications, and ability
• Performance
• Attendance
• Disciplinary record

Statutory notice

The employees chosen for redundancy must be given notice. The minimum notice period depends on how long they have worked for you. If they have been employed for one month to two years, they must be given at least one week’s notice. They must be given an extra week for every year they’ve been employed between 2 and 12 years. For anyone who has been employed for longer than 12 years, the notice period must be at least 12 weeks.

Notice pay

During the notice period, employees must be paid, even if you don’t want them to work.

Redundancy pay

Any employees who have worked for your business for at least two years are entitled to redundancy pay. The amount they are entitled to will depend on their age and how long they have worked for the business.

They will be entitled to:

• 5 weeks’ pay for each full year of employment after their 41^st birthday
• 1 week’s pay for each full year of employment after their 22^nd birthday
• 5 week’s pay for each full year of employment up to their 22^nd birthday

Some businesses may be unable to pay redundancy because it would cause the business to become insolvent. If this is the case, the Insolvency Service’s Redundancy Payments Service may lend you the money.