A Guide to Redundancy

Redundancy is a painful process for both the employee and the employer. It is a decision that many businesses seek to avoid but sometimes a restructure of the organisation or reducing the number of roles is necessary.
Redundancy occurs where an employee is dismissed for reasons such as:

1. Employer ceasing business
2. Requirements of the business have changed
3. Employer requires less employees
4. Change in work systems (mechanisation etc)
5. Role amalgamation

It is essential when roles are being made redundant the selection and consultation process is fair and objective and those employees who are selected are done so in a transparent and fair manner. Most third-party claims in relation to redundancy are often based on the selection process.

Selection
There are two broad methods of selection for redundancy:

1. Last in First Out
2. Selection matrix: objectively selects employees for a redundancy based on a compiled score of their skills, knowledge, and other relevant criteria. The criteria must be as objective as possible, which should only be based on facts which have been documented and/or raised to the employee prior to the redundancy.

Employers would be bound by the precedent for redundancy selection in the company or agreed mechanisms between a union and the company. It is imperative that businesses are aware of the following two points:

• Custom and practice – what did the company do in previous redundancies if any?
• Agreed procedure – is there a precedent or an agreed procedure in place? This is more commonly seen in unionised work environments.

In terms of the recommended process, employers should make an announcement to the employee(s) – advise them they’re ‘at risk’ of redundancy, explain why this is happening and inform the employee you will then be entering into consultation with them.

Consultation

• Consultation meetings should be arranged with the employee(s), an employee is entitled to bring representation i.e., colleagues/external union official.
• During these meetings it’s important to give the employee(s) an opportunity to have their input/say into the situation.
• Consider proposals for alternative roles/options – implement if feasible.
• If there is no alternative roles/no other viable options – you are looking at proceeding to termination – and give notice of redundancy.
• Ensure notes are taken at each meeting and request that the employee(s) sign these to confirm they are an accurate reflection of the items discussed.
• Consider offering a right to appeal the redundancy decision.
• Redundancy process should not be rushed - there should be at least a minimum of two weeks for consultation.

Award for Upset and Hurt: Case Law Example

Individuals who bring successful discrimination claims are entitled to be compensated for the upset and hurt they have suffered by way of an injury to feelings award. These awards are separate from, and in addition to, compensatory awards for financial loss which are uncapped.
Awards for injury to feelings have been increased for all claims presented on or after 6 April 2023 and are now over double the original rates.
The new bands are as follows:

It is worth remembering that a claimant does not need to prove that they have suffered any ill health or produce medical evidence in order to get an injury to feelings award – although if they do, they may get a higher figure.

The tribunal will consider the extent to which the victim of discrimination has had their feelings injured and will attribute a financial value to that injury. Awards in the upper band are rare and most awards are in the upper lower and middle bands.

Case Law Example:

Mrs. Messum, a qualified executive HR assistant at Bradford, faced discrimination and mistreatment after becoming pregnant. Despite her qualifications, her boss started assigning her physically, unrelated demanding tasks. She was signed off due to pregnancy-related issues and during sick leave, was asked to attend an urgent investigatory meeting. When she could not attend due to illness, her maternity leave was initiated. Later, she was asked to attend the meeting again, in her own home with an 8-week-old baby and if she did not attend there may be disciplinary action.

After she returned to work, she attended the investigatory meeting, during which she was accused of stealing food from the canteen. She said that her manager had given permission for her to take food home when she had worked late and did not have time to take a break. Despite her explanations, she received a verbal warning and her job duties were changed. Her HR duties were taken off her and she was instead asked to process sales orders and, later on, to do housekeeping duties - including laundry. She resigned, claiming unfair dismissal, pregnancy/maternity discrimination, and harassment.

The tribunal ruled:

1. Unfair dismissal: Company actions breached trust, mishandling investigations and changing her role fundamentally.
2. Pregnancy/maternity discrimination: Demoting her and changing her role was unfavourable treatment due to her condition.
3. Harassment: Repeated unwanted contact during her pregnancy and maternity period was deemed harassment.

The tribunal awarded Mrs Messum £18,000 for injury to feelings, an additional ACAS uplift of 25% (because the employer had not followed the Acas Code of Practice) plus interest amounting to £28,000.

This case underscores persistent issues with pregnancy and maternity discrimination, with a significant percentage of mothers facing mistreatment or job loss. Legal protections exist, but many employers still fall short. It's vital for employers to understand their obligations and treat pregnant employees fairly.

Posted in Bullying and Harassment, Employment Tribunals