Making Redundancies 

Get help to structure a fair, legal process 
Make the process run smoothly for a faster resolution 
Protect your business interests 
Reduce the risk of costly tribunal claims 
Draft or advise on settlement agreements 
Our Employment Law solicitors can help you to structure a fair, legal redundancy process tailored to your business circumstances. We will get to know your individual business and the aims you hope to achieve through making redundancies, so we can help you to make the best decisions for your organisation. 
 
We will help you to understand all your obligations, from correct consultation to choosing candidates based on legal considerations, to reduce the risk of legal claims and penalties. 
 
Thanks to our extensive experience we can support you through the redundancy process swiftly and smoothly, reducing the period of upheaval and uncertainty for your business and your employees. 
 
Get in touch to book an initial meeting with one of our Employment Law solicitors to discuss your aims and how we can help. 
 

Do I need a solicitor? 

A redundancy process can be challenging time for your business, especially if the need to make redundancies is driven by financial concerns rather than choice. There are dangers in creating a process without the benefit of legal advice. Getting it wrong can lead to time-consuming and expensive claims against the business and risk reputational damage. 
 
There are several reasons it is important for you to understand the law and get the process right: 

Legal claims 

If your redundancy process isn’t correct, legally, employees who are made redundant may have a claim against the business for unfair dismissal. You may also risk discrimination claims based on how you choose candidates for redundancy. 
 
Tribunal claims are costly in legal fees and compensation. Legal claims also cause stress, take up your time and create a serious reputational risk. 
 
Compared to the risk of a tribunal claim, legal advice is a valuable investment. 
 

‘Protective award’ for failure to follow collective consultation rules 

If you are considering making multiple redundancies the rules on collective consultation may apply. If you fail to follow the rules on consultation your staff may claim a ‘protective award’. This is in addition to compensation for any other employment claim. 
 
A protective award is up to 90 days' pay for each affected employee, even if they were not selected for redundancy in the end. The actual amount awarded depends upon the extent of your failure to meet your obligations. This can be particularly costly if many employees are affected. 

Staff morale 

The redundancy process can be unsettling for your employees. Even those who ultimately keep their jobs will be affected by the process. 
 
Redundancies are often made with the aim of improving efficiency, but staff who have lost heart in a company are rarely as productive as those who are happy at work. A poor redundancy process may diminish morale and could be counterproductive. Unhappy or unsettled employees can also pose a reputational risk. 
 
Having a fair and smooth redundancy process will help your employees keep their trust in you, and in turn, benefit your business. 
 

Breach of contract 

If you do not meet your contractual obligations, you may unintentionally breach your employees’ contracts of employment. A significant breach could terminate the contract, and your former employee may not be bound by any restrictive covenants or clauses intended to protect your business interests. Depending on your employment contracts, this could create a significant risk for your business. 

How do I make redundancies lawfully? 

Make sure you have the legal right to make redundancies 

Your business does not have to be struggling to make redundancies, but you must make sure that the statutory definition of redundancy is satisfied. Redundancies cannot be used as an excuse to dismiss staff members for reasons unconnected with redundancy. 
 
Before beginning a compulsory redundancy process it is sensible to consider whether there are alternatives available. Legal advice can be very useful here. 
 

Correct consultation 

Decisions such as which organisations you must involve, how long consultation must last, and the notice you must give will depend upon factors specific to your business. The number of variables mean this can be complicated to work out. If you get it wrong, you could end up paying additional compensation to employees or facing unlimited fines from the Redundancy Payments Service. 
 

Create a tailored process 

There is no one ‘standard’ process that works for all businesses. Every business is different, and individual factors will affect how you go about making redundancies. Details such as how much warning you need to give employees and who you need to involve in decisions will depend upon circumstances such as the number of roles you are making redundant, and the time individual employees have worked for you. 
 
A template process may not account for your specific circumstances and what worked for another business may fall short of your legal obligations, leaving you open to the risk of claims. 
 

Understand the status of your ‘employees’ 

An individual’s redundancy rights depend on their employment status. This is not always as clear cut as referring to status in their contract. 
 
If a former member of staff disagrees with you about their employment status and their rights, you could face an employment claim. In this case, the tribunal would consider which status best fits your working relationship to decide what rights the individual is entitled to, which may include a right to a redundancy payment. 
 
A solicitor can help you to work out the status of your staff in practice, so that you know what rights they have and what obligations you have. This will avoid mistakes that could lead to you wrongly denying an employee their rights and result in you facing an unfair dismissal claim. 
 

Use the right factors to select people for redundancy 

There are well established legal principles that influence and affect how you may choose employees for redundancy. You must make sure that you adhere to those principles and don’t create an unnecessary risk of claims against the business. The law prohibits the use of certain criteria; a poorly thought out or mis-applied procedure may discriminate against some employees even if you didn't intend to. 
 
A solicitor can help you to plan a selection system that protects your business interests without leaving you open to legal claims. 
 

Get in touch 

Do you have a legal matter you'd like to discuss with us? Get in touch using the details below or use the form here and a member of our team will be in touch to discuss your enquiry. 
Phone: 0121 452 5130 
Address: Spencer Shaw Solicitors Limited 
Vancouver House, 111 Hagley Road, Edgbaston, Birmingham B16 8LB 
Opening hours: 
Monday - Friday 9:00AM - 5:00PM 
Saturday, Sunday & Bank Holidays - Closed 
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