Redundancy Pay Advice for Employers

Redundancy is an unpleasant but occasionally necessary part of doing business. Whether your business is going through a period of change or profits are not where they should be, sometimes redundancy is the only way forward. We understand that, which is why our employment law redundancy service is here to help guide you through every step of that journey.

Before starting on the redundancy procedure, it’s very important you learn how to protect yourself from certain negative outcomes.

From claims of unfair dismissal to discrimination allegations, the redundancy process must be handled carefully, sensitively and legally. That’s where Citation’s redundancy employer support comes in.

Our HR and Employment Law teams are experts with commercial or legal experience, as standard. We’ll guide you through the right process. We’ll help you handle sensitive conversations and assist with the selection process. And we’ll be by your side if anything crops up along the way.

With us by your side, you can be confident that you won’t be faced with costly employment tribunals, workplace disruptions or any other difficult redundancy situations.

Redundancy support with Citation

When it comes to redundancies, it can be an overwhelming and often emotional experience. And we understand that having the support of an expert can relieve some of the stress involved in that process.

We can help you anything from:

  • Determining whether or not redundancy is the right option for your business
  • Working out how many employees will be directly or indirectly affected
  • Talking you through compulsory and/or voluntary options
  • Guiding you along the consultation process
  • Finding suitable alternative employment in other areas of your business
  • Explaining your redundancy package responsibilities – including pay and pay in lieu of notice

All our advice is unique to you. We’ll carefully consider your company’s circumstances and come up with bespoke solutions, that are both legally and commercially sound.

We’re here to help you achieve your desired outcome – without the hassle.

What you get

  • 24/7 access to our advice line – manned by our HR and Employment Law team, all of whom have either legal or commercial experience.
  • We’ll keep you updated as soon as legislation is updated or your legal responsibilities change. We’ll take care of the detail so you can focus on the big picture.

The redundancy process

Before making employees redundant, you should consult with them. This must be done individually and in some cases must also be done collectively. During the consultation process, you should cover things like: why redundancies need to be made, and whether or not there are any alternatives to redundancy.


Alternatives to redundancy

You should try to avoid compulsory redundancies as much as you can. A few alternatives include:

  • Offering voluntary redundancy
  • Reducing or removing overtime
  • Finding suitable alternative roles for employees in other areas of the business
  • Restricting recruitment
  • Allowing employees to work flexibly
  • Eliminating your reliance on casual labour

Early retirement

Early retirement on enhanced pension terms can sometimes be an alternative to redundancy and is used as an incentive for employees to retire early. To stay within the law, remember you cannot force any employee into early retirement.

The cost of redundancy

Before going down the redundancy route, remember to consider the costs involved. Everything from statutory redundancy pay to contractual redundancy terms will all come into play. If you're confused about who is entitled to redundancy pay, we've created our own redundancy calculator. Just punch in the number to get a better understanding of what your employees are entitled to and what your obligations are.

Garden leave

Garden leave is relevant to any dismissal. It can be particularly useful in redundancy cases to minimise workplace disruption or prevent redundant employees from accessing confidential data. What is garden leave? Garden leave applies during notice periods and is when an employee’s instructed not to work. When on garden leave, an employee's duty of good faith toward their employer, along with any duties outlined in their contract of employment, must continue. In return, employees receive the same salary and contractual benefits as they would do if they were still at work.

Reasons for redundancy

Redundancies arise when employees are no longer needed to perform their job. This could be for a number of reasons:

  • Your business is changing what it does
  • You’re carrying out your business activities in a different way, e.g. automating
  • Your business is changing location
  • Your business is shutting down

Redundancies can be either compulsory or voluntary. Before proceeding with any type of redundancy, we’d always recommend seeking legal advice.

For a redundancy to be legitimate, you have to demonstrate that the employee(s) job genuinely no longer exists.

Voluntary redundancy

Voluntary redundancy is when you ask employees if they’d like to put themselves forward for redundancy. If nobody or not enough of the right people put themselves forward, you may have to proceed with compulsory redundancy. Anyone can step forward for voluntary redundancy – they’re only volunteering to put themselves in the ‘redundancy pot'. You don’t have to make someone redundant just because they’ve volunteered.

Compulsory redundancy

Compulsory redundancy is when employees are required to leave the business, whether they would choose to or not.

Selecting employees for redundancy

If you’re faced with making compulsory redundancies, it’s important you conduct a fair and transparent selection process. This is to make sure that you’re not discriminating against anyone.
Fair reasons when making selections for redundancy include:

  • Skills, qualification and aptitude
  • Standard of work and/or performance
  • Attendance record
  • Disciplinary record

Some employers select employees based on a ‘last in, first out’ basis. Although this is allowed (except in Northern Ireland), you must be able to justify your decision to select employees based on their length of service.
Length of service shouldn’t normally form the entirety of your selection criteria.

Unfair selection criteria

There are a number of reasons that shouldn’t be used to make an employee redundant.

Some examples include:

  • Pregnancy or maternity status
  • Family – parental, paternity or adoption leave, for example
  • Acting as an employee representative
  • Working on a part-time basis

Redundancy: a starter checklist for employers

A five-point checklist to get employers started on a fair and transparent redundancy process in their business.

Download the guide

Redundancy: nursery checklist

A checklist of the five key things you'll need to consider before embarking on a redundancy process for nurseries.

Download the guide

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