May 2025 saw the largest rise in availability of candidates for jobs since 2020, when the world was being ravaged by the first wave of COVID-19.
Good news if you are hiring, but a sign that redundancies are prevalent in the economy right now – those, plus fewer vacancies, are behind the rise, according to the Report on Jobs Survey by one of the Big 4.
Last week, we looked at the importance of having a strong recruitment process. This week, we focus on redundancies, which need an equally tight adherence to process, lest you get taken to an employment tribunal.
To do it right, which is essential, it is a multi-step process, and depending on circumstances, there may be additional considerations to make. Here is a broad overview (although we would always recommend contacting us for professional advice):
Preparing the business case for redundancies
While few business owners will take the matter of redundancies lightly, it is important to prepare a proper business case for the decision, demonstrating your underlying influences. This will guide you in your decision making, provide added resolve and act as evidence should you be challenged.
Decide the roles for redundancies, not the people
At this point, your redundancy should not be focusing on people, but roles. It may be cost-cutting, downsizing, closing a part of the business or reflecting technological gains. This can get complicated, especially when there are similar roles across different areas of your business. To do it fairly, you may have to broaden your parameters for selection.
Is collective redundancy applicable?
There are extra rules if you are making more than 20 people redundant within 90 days, and this is known as collective redundancy. For example, the Secretary of State must be informed and a consultation of thirty days is required before making any redundancies. Staff representatives must be elected or recognised Unions involved. The need for professional advice is even more pressing.
An employee consultation
Your initial employee consultation needs to happen as soon as possible, before actual decisions have been made. A group meeting with those whose roles are under threat is the norm, followed by information to all staff. Remember to involve everyone.
Explain the issues to them during further meetings and listen to their thoughts and ideas. They may have constructive proposals that provide an alternative, or give you further clarity on continuing with the redundancy process. Voluntary redundancies are where you offer a package, but that can be problematic. Do keep written notes of all meetings and confirm each stage in writing.
Choosing selection criteria
Assuming the redundancy process is continuing, it is now time to work out who stays and who goes. This needs to be well documented and fair. Scoring candidates on a matrix of 1-5 against measures like skillset, disciplinary record, performance and attendance is usually a good way to do it.
While you should keep equality law in mind at all stages, do so especially now. Attendance is particularly important if someone’s absence is linked to a disability or pregnancy. And be mindful of the risk of indirect discrimination too, say connected to flexible working that a female employee may have to manage childcare.
In fact, pregnant employees or those on maternity leave have special protection throughout the process. Other pitfalls are scoring someone down because they were a whistleblower, or if they had queried their remuneration in relation to the minimum wage. Employees have the right to see their own score but not that of others.
Informing individual employees of your findings
Once your selections have been made fairly, you can inform the individual employees. Be ready with the correct redundancy payment calculations and notice periods, and answer any questions. But also listen to what they have to say, it should not be too late yet to take on board new ideas for solutions.
Before confirming their redundancy, it is mandatory that you explore whether an alternative “suitable role” can be found in your business and offered to them.
Put your final decision in writing, confirming all the pertinent points like how the decision was come to, what the redundancy pay and notice period are. If you want them to work their notice, they are allowed time off for interviews. If you want to pay their notice in lieu, do check you are allowed contractually to do this.
Even if you came to a fair decision, but did not follow the correct process you could be penalised at an Employment Tribunal. That is why taking advice at all stages is so important.
Help with redundancies
We have a lot of experience across the UK of helping businesses with the difficult process of redundancy. If you would like assistance too, please do not hesitate to contact us.
