Managing lay-offs

Redundancy is one of six potentially fair reasons open to an employer when considering the dismissal of an employee.

It differs from the others as the employer terminates their employment without the employee having done anything wrong and the handling and wording used during the process is therefore different.

When dealing with making 20 or more employees redundant there are rules applicable relating to the lengths of consultation periods. Job centres and trade unions must be contacted. If you have an agreement with a trade union, even if there are less than 20 employees, you will need to honour it.

The statutory dispute resolution procedure applies to redundancies where less than 20 people are being made redundant, so within this process you must adhere to the 'letter, meeting, appeal' approach. You could announce the potential redundancy situation by handing a letter to your staff at a meeting explaining that you wish to consult with them to discuss what can be done to save their jobs.

Redundancy starts with the job, not the job-holder. The starting point is to seek ideas the workforce may have as to how threatened positions may be saved. Before this, you should have looked at other means to avoid the problem without making people redundant.

If redundancy is required then selection begins. There is no specific, essential procedure in law for selecting employees; the law requires only that it is fair.

You should have a redundancy policy published in your handbook and setting out selection criteria.

Traditionally, 'last in, first out' has been used, however this may now be perceived as age discrimination. Your policy could be 'retaining the best', which would involve formal appraisals. Alternatively, there could be an understanding that if the job has to go the employee would leave with it.

If jobs cannot be saved you must consider alternatives. You may be part of a group of associated employers and so must talk to them about vacancies. Staff must be consulted, including those on long-term sick or maternity leave, and they must be invited to apply for vacancies.

Redundancy is complicated and professional advice is recommended. While you cannot prevent someone from taking you to tribunal, if you have followed the correct procedures you will have a good chance of winning.