Firstly it is important to ensure that you have done all you can to avoid redundancies. This means releasing any freelancers or self-employed contractors, reducing overtime, avoiding active recruitment, filling vacancies elsewhere with existing employees and so on.
If you’ve come to the conclusion that there’s no other option, you’ll then need to decide which roles will be made redundant. But this needs to be done so fairly and you should focus on the roles to be made redundant – not people. You cannot decide based on pregnancy, part-time employment, age or race and so on. You may look at skills, ability, attendance, length of service and more.
When you’ve made a decision on the roles that are at risk, the next step is to hold redundancy consultations. You must work through the consultation process in full; going ahead without doing so may mean that employees can claim the redundancy process/dismissal was unfair.
If you’re making twenty or more employees redundant within a 90-day period, you will need to follow collective consultation rules and submit an HR1 form to the Secretary of State via the Insolvency Service’s Redundancy Payments Service (RPS). You will need to consult for at least 30 days, increasing to 45 days if you propose to make 100+ redundancies.
In order to safely bring the contract of employment to an end you must issue the employee with proper statutory or contractual notice.
Minimum statutory notice periods are as follows:
To qualify for a statutory redundancy payment (SRP), employees must have at least two year’s continuous employment.
The amount of statutory pay can vary based on their age and the length of their employment. If you’re not sure on what this would be, it might be best to seek advice.
Employers may choose to enhance redundancy pay and this should all be decided ahead of the process commencing.
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