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Chamber HR News – Handling Redundancy July 27, 2007

Posted by liverpoolchamber in Business, Chamber HR, Chamber Services.
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Over the last couple of weeks we have been looking at the most common areas that businesses are effected by when dealing with employment issues including being compliant with employment law and grievance & disciplinary. This week we review the unfortunate circumstances of dealing with redundancy.

The ChamberHR service is provided as part of your chamber membership and will provide you telephone advice and documentation on a number of employment issues. Andrew Bines from Qdos Consulting who provide the ChamberHR service will be contacting all members shortly to ensure that you can access the website and to answer any questions you may have regarding this service.

If you have not received your website log in details or you are a new members and would like to register to use the service please contact the membership team by email at membership@liverpoolchamber.org.uk or by telephone on 0151 27 1234.

GUIDANCE ON REDUNDANCY

There may come a time for employers where redundancy is the only option, but employers are reminded that in order to make a redundancy, a genuine redundancy situation must have arisen. This may be a reduction of the work for which the employee is engaged, where company premises are being relocated or where, perhaps, a serious financial situation is arising dictating early cuts in labour costs.

Redundancy must not be used simply as a vehicle to dismiss an employee who is proving unsatisfactory.

Wherever possible an employer should consider alternatives to redundancy such as reducing the use of agency workers, ceasing recruitment or possibly using lay off or short time working.

A full, formal and proper consultancy process should always be provided. Ideally this should be supported by documents to show:

How the redundancy situation has arisen.

Outline clearly the criteria being used to select which employees are to be made redundant.
Consideration that has been given to finding alternative employment within the company or associated companies/group.

Employers should fully consult with the affected employees prior to making any selection.

Employees who are put at risk of redundancy must be given reasons why they were selected and the opportunity to challenge that selection.

Dismissals of employees should be undertaken using a proper porcess that complies with the Government Statutory Dispute process.

The employees being dismissed should be made aware of the various elements of terminal pay they will receive.

Any short cuts in the pre-dismissal process can be potentially lethal and could result in a successful claim at an Employment Tribunal, especially if any of the following apply:

Dismissal is for a spurious redundancy reason.

Selection was based on unsound criteria.

There was not a consultancy process.

No alternative employment possibilities were considered.

In any redundancy exercise it is crucial that advice should be taken from the advice service.  Where large scale redundancies are envisaged involving 20 or more employees, the formal notification process to the Department of Trade and Industry has to be undertaken, followed by a formal minimum consultation period (30 days where contemplating between 20 and 99 employees and 90 days where contemplating 100 or more dismissals within a 90 day period at one establishment).

Further guidance on redundancy is available in the redundancy guidelines on the ChamberHR website www.chamberhr.co.uk.

In our next e-news we will look at Absence & Sickness

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