Business reorganisations / restructures are part of everyday life for organisations looking to remain viable and competitive in the marketplace. Where they involve job losses, however, there can be exposure to unfair dismissal claims. We look at the steps employers can take to mitigate the risks.
Consider whether there is a genuine redundancy situation
An employer must demonstrate that the dismissal is for a reason that falls within the statutory definition of a redundancy, i.e. that it is due to the closure of the business or the employee’s work location, or that there is a diminishing need for employees to do work of a particular kind. If the employer considers that it needs fewer people for any of these reasons, there is a potential redundancy situation.
Apply a fair selection procedure
Unless the redundancy involves a standalone role, an appropriate pool of selection should be identified. Objective selection criteria should then be applied to those employees in the pool and professional advice sought on any aspects of the criteria that may be potentially discriminatory. If there is a pre-existing method of selection the employer needs to consider if there is a good reason to deviate from it.
Consult with affected employees
Employers must comply with the statutory duty to inform and consult any recognised trade union, or in the absence of one, elected employee representatives where 20 or more redundancies are being proposed. They must also notify the Secretary of State. Where fewer than 20 redundancy dismissals are proposed, an employer still has a duty to engage in ‘meaningful’ individual consultation with the affected employees, and to follow a fair dismissal procedure. The purpose of consultation, whether with unions, elected representatives or individuals, should always be to explore ways of avoiding or reducing any redundancy dismissals and / or mitigating their consequences.
Consider any opportunities for alternative employment
The employer must show that proper consideration has been given to opportunities for alternative employment and should search throughout its organisation and, if appropriate, any other organisations in the same group. Even jobs which involve a reduction in pay / status should be brought to the attention of affected employees. In some circumstances, the employer may be expected to consider making a more junior employee redundant in order to retain a more senior one. Any redundancy dismissals should be deferred where new job opportunities could be imminent.
EML’s Director and Head of HR, Chris Nagel, comments…
“Something that’s not covered above is how an employee on maternity leave should be treated in the context of a pending redundancy exercise. Crucially, she must be offered any suitable alternative employment before colleagues who aren’t on maternity leave and there’s no requirement for her to actually apply for the job. This is because a woman on maternity leave may not be able to apply or attend interviews depending on the stage of pregnancy or new parenthood she’s at. She may also be at a disadvantage on account of being out of the workplace for some time. That said, she shouldn’t receive artificially high scores against a selection criteria just because she happens to be on maternity leave as this would risk prejudicing others who are also at risk of redundancy and could form the basis of a discrimination complaint.”
Whilst no employer relishes making redundancies, if properly planned and executed, organisations need not fear the risk. At EML we can offer straightforward advice and guidance on such matters, and undertake onsite management of the process if required