The pandemic situation continues to put businesses under considerable strain and is pushing restructuring up the agenda. Waves of redundancies have already taken place and many more businesses are planning headcount reductions as the level of government financial support scales down.
Making employees redundant is not an easy or pleasant task, but may be necessary for the survival or longer-term viability of the business.
It’s important to recognise that the redundancy process can differ depending on the number of employees being made redundant and the size of business. Regardless, all businesses should make a plan to manage each stage of the redundancy process and include:
- Business case for redundancies and justification for specific role eliminations
- Voluntary redundancy scheme
- Proper consultation process with employees and a fair selection process
- Correct terminology throughout the communication process
- Details of notice and redundancy payments to be provided
- Compliant documentation
- Communication and support for both leavers and survivor employees
- Go forward planning, eg. work allocation
When affecting redundancies, the person breaking the bad news to employees must be able to deliver the messaging clearly, professionally and with compassion. Employees will have lots of questions about what’s happening so it’s important the person communicating their redundancy understands the plan in detail and is experienced in managing difficult conversations. They should know who to turn to if they, or other employees need support. If the redundancy situation is handled properly it can make a big difference to:
- How employees react and cope with being made redundant – their income, security, sense of purpose and belonging will be impacted
- The morale of employees who are staying on and if your business is perceived as a good place to work
- The ability for the business to move forward successfully
- Minimising legal and financial risk for your business, for example:
- failure to manage a fair process could result in an unfair dismissal claim costing up to £88,519
- failure to follow a fair selection criteria could potentially result in discrimination claims which are uncapped
