Employment lawyer Charlie Wood from Cheshire law firm SAS Daniels has issued a stern warning to local business owners that the Employment Tribunal could come down hard on them if they fail to follow the correct procedure when making staff redundant.
With the recent ending of furlough, forecasters have predicted a spike in job losses as businesses discover they can’t afford to retain staff without the financial support provided by the scheme. Wood has strong advice for such businesses:
“If you have to make redundancies, do it properly. If you don’t, the financial consequences further down the line could be far more damaging than the short term gain in cashflow.”
Wood says deciding to make someone redundant is never an easy decision but employers could do much more to make the process as amicable as possible, while also protecting themselves against claims of unfair dismissal.
“Above all else, you must have a solid business case for making someone redundant. This needn’t be complex but should state what you’re proposing to do and why it’s necessary. In short, your employee needs to grasp why it’s happening. We are seeing far too many examples of businesses simply citing Covid as a reason for reducing staff. This may well be the root cause but it doesn’t explain in factual terms the impact Covid has had on the business. You need to provide hard facts and figures to illustrate, for instance, how Covid has led to a drop in turnover or sales.”
Charlie Wood says it is equally important that business owners present their case as a proposal, not a fait accompli.
“You need to talk in terms of what ‘might’ happen. If you fail to do this, you risk accusations of having pre-judged the decision, which defeats the object of a consultation and could leave you open to a claim.”
Allowing sufficient time for the process and having a dedicated note taker at all meetings, although not a legal requirement, is certainly advisable.
“Contrary to popular belief, following the correct procedure need not take an age. Making someone redundant – properly – can be achieved in as little as a fortnight. There is nothing to be gained by cutting corners in a bid to rush the process along. Trying to lead a meeting, while taking notes is a challenge. As well as capturing impartial information, accurate notes will prove invaluable should you face a Tribunal in the future, when recollection of what’s been said has probably faded.”
Wood’s final piece of advice is to ensure the employee is provided with adequate information, in a format they understand, and given the opportunity to ask questions throughout the process.
“Without doubt the main reason employees bring claims to the Employment Tribunal is because they don’t understand why they’ve been made redundant. All too often, they feel they’ve been singled out for personal reasons or feel that the decision is simply unfair.
“A simple FAQ which anticipates some of the possible questions an employee might ask is very useful. It should set out what’s happening, why it’s happening and make it clear how they can meaningfully engage in the process. Even if they aren’t interested in this level of detail, it will help concentrate your own thinking and also demonstrate you have done your best to explain things clearly should you face a Tribunal in the future. You really do need to give people the chance to absorb what’s being presented to them and also the opportunity to ask questions and even make suggestions about possible ways to alleviate the situation. Do take these seriously.
“Tribunals are switched on to companies going through the motions and simply treating the redundancy process like a tick box exercise. Yes, there is a process to follow but marrying this with thought and meaningful communication can make all the difference to how your actions are received.
“It ultimately comes down to treating people with respect and thinking how you would want to be treated if you were facing redundancy yourself.”