HR Consultancy Corner: Restructuring and redundancy top tips

With a continued turbulent economic climate it’s not surprising that many organisations are looking at re-structuring and/or redundancies as a way to help secure the future of the business and off-set rising costs.

Regardless of the size of your business, it’s vital that you have the expertise to handle the process sensitively and fairly to ensure legal compliance, so that the inevitable adverse effects to staff morale are managed and, importantly, the risk of potential employment tribunal claims are minimised.

More recently I have been supporting a number of organisations in navigating the procedural steps that must be followed, ranging from collective consultations to a tricky appeal.

Some top tips from recent processes are below for those who plan for a re-structure/redundancy exercise:

• Before embarking on redundancy it’s important to consider if there are alternative measures you could take that avoids redundancy (for example, re-organisation of work, recruitment freeze, overtime ban, change of terms and conditions, bonus cuts etc). Whatever you consider, try to ensure that any proposed cost saving options are fairly applied so that no one particular group of staff feels disadvantaged more than others.
• Be mindful that recruitment is becoming more challenging! You may be able to find a way to save costs by re-structuring in a way that improves efficiencies and allows you to retain valued staff.
• If your restructure leads to dismissals you will need to have both a fair reason for redundancy and also demonstrate that you have followed a fair procedure to defend any unfair dismissal claim for those with in excess of 2 years’ service.
• When breaking the news and making an announcement, as necessary, you should have a clear and concise explanation covering the rationale behind the proposed changes, what areas are impacted, and basic information to share on the process that you are about to embark on. Having attended many of these you can decide whether to do this together or separately. This decision and rationale will carry you through to your final decision so it is worth spending time on this and getting it right.
• When it comes to your redundancies if you are unsure whether collective consultation applies, get in touch with one of our Employment Team for advice.
• If you need to elect representatives we can help with paper ballots or an electronic ballot. Are employees allowed to elect themselves? what if they put forward someone from another employee group by mistake? what if the person elected does not wish to be a representative. Let us know if you would like to receive guidance on how to elect representatives.
• When consulting with staff, remember you need to consult with employees regardless of whether they’re in the workplace at the time. So if an at-risk employee is on long term sickness absence or family-related leave you need to work out how best to consult with them and plan in timings to share the news as close to all employees as possible.
• Ordinary unfair dismissal protections only apply to employees who have two years’ continuous service. You could choose to cut short the process for staff with less than two years’ service. However, we strongly advise that you seek advice from one of our Employment Team before doing so. Do be cautious for any protected characteristics as an unfair selection or biased criteria could give rise to a claim.
• Don’t forget the obligation to consider alternative work continues right up until the point of dismissal. So you need to make sure you’re continuing to keep an eye on vacancies during any employees’ notice period.
• Be mindful that employees on maternity, adoption or shared parental leave have an automatic right to be offered suitable alternative vacancies and they have priority over other employees. Get in touch for advice on applying this protection. Remember there are plans for this to be expanded, and we will keep you updated as plans develop.
• Remember where you’ve given notice of dismissal to an employee with two or more years’ continuous service, they’ve got a statutory right to take a reasonable amount of paid time off during working hours to seek alternative employment or to arrange training for future employment.
• The final stage will be offering an appeal for any employees who are made redundant. Strictly speaking there’s no actual legal requirement to offer appeal against a redundancy dismissal, however, the lack of an appeal is a factor that tribunals will look at when considering the overall fairness of the redundancy dismissal, and that’s why it’s often seen as best practice to offer an appeal to anyone who is made redundant.