Redundancy Planning: Take a Professional Approach

The Jaluch Guide to Redundancy Planning (UK).

Welcome to this 2 minute HR Blast. Currently a significant number of our clients are looking to reduce staffing numbers or otherwise to rationalise parts of their organisation in order to strengthen the whole. We, therefore, thought it timely to focus on Redundancy in this Blast.

If you manage redundancies well, you will get immense satisfaction from a job well done, as well as knowing that those affected will be in the best possible place to get their lives and careers back on track. Manage the project badly and you may find yourself responsible for a lot of ill feeling, upset and negativity. That’s quite some responsibility, but success all too often rests in the planning ahead of announcement date – get that right and you’re more than half way there.

So here is your Jaluch guide to good redundancy planning ahead of the Big announcement… plus our do’s and don’ts for effective redundancy consultation are set out at the end.

Stage 1

The top level plan, information gathering, setting out responsibilities

  • Gather initial information, identify clear organisational needs and goals.
    • What do you want to achieve? Why? By when? What are the options? What are the opportunities? What are the challenges? What is the budget/anticipated cost? Who are the key stakeholders?
  • Appoint a person to be responsible for successful change (redundancy) project management.
    • Provide them with all the information as early as possible (and don’t even think of only giving them half the information they need, justifying this on grounds of ‘need to know basis only’!)
    • Draw up – and get signed by all those involved – an up to date confidentiality agreement.
  • Ensure HR team/those responsible with assisting are informed and experienced enough about employment law and the challenges of redundancy projects to be able to support professionally. Take time to train/retrain if required.
    • Set out clear parameters regarding confidentiality, security of documents etc.

Stage 2

Putting detail on the plan, staff representatives, more information gathering

  • Elect, appoint and induct staff reps, if not already in place and redundancy numbers likely to exceed 19.
    • Check to see if you have a legal requirement to consult with any recognised unions.
    • If staff reps are already in place, provide training in the law, the process, the skills required and the challenges they might face.
    • If electing from new, allow 4 weeks for process of nomination of reps, voting, appointment and induction. We have seen this done in one week so it can be achieved, but it’s not great for anyone’s stress levels and the staff reps themselves tend to say they feel under prepared and over pressured.
    • For election of reps check out the legal parameters and best practice or contact us for support.
    • Ensure you know the statutory consultation requirements and the obligation to inform the Secretary of State for Business, Innovation and skills by completing an HR1 Form if you are making 20 or more staff redundant within a 90-day period.

For training training reps, get more info here.

  • Create an initial project plan, including timescales, individual responsibilities and key actions.
  • Identify associates, consultants and non-employed workers providing services. Seek to terminate these contracts at an early stage wherever possible and appropriate.

Stage 3

Involving staff rep, data cleansing, selection criteria, more detail on the plan

  • Initial communication of top level plans/intentions with elected staff representatives.
    • Law requires involvement of staff reps as early as possible and in some cases this can be many months (or even years) ahead of any announcement to staff.
  • Begin cleansing of data such as staff addresses and other contact details as clean data is required for any exercise such as this where timely employee communications are essential.
  • Begin to develop ideas around preferred approach to redundancies including attitude to voluntary redundancies, scoring mechanism if selecting roles for redundancy.
    • Develop/review company redundancy procedure.

Stage 4

Communications, communication planning, spreadsheets

  • Regular meetings with staff reps to advise/consult on progress and plans.
  • Recognising that consultation might result in some of the detail/approach changing, begin to put together a briefing and FAQ document for managers, staff, press
  • Begin to develop automated report/spreadsheet identifying names, salaries, DOB’s, length of service etc to be ready for scoring at a later date.
    • During this process an amazing number of staff either move house, get a year older or achieve another full year of service. Your report/spreadsheet needs to be constantly updated and revised to include these things.
  • Create full communication for employees (and press) including, but not limited to, the business rationale, the intended timing, process, numbers involved, mechanism for selection, and if any enhanced redundancy payments or benefits being offered.
  • Identify how to roll out the initial communication, when it will be done and how those not in work on that particular day will be picked up.
    • Don’t forget those who are on maternity leave and long term sick leave or absent for others reasons.
    • Don’t forget to think about those who travel on company business.

Stage 5

Planning for post announcement activities

  • Prepare for the resources you will need during individual consultation meetings.
    • Someone to lead each meeting plus someone to note take.
    • Information and finance packs for each person selected for redundancy.
    • Organise sufficient numbers of rooms for all meetings to be held in one day (ideally).
  • Prepare template letters for redundancy consultation meetings, appeals etc.

Consultation – Some Do’s and Don’ts

DO

  • Always consult with employees before making any redundancies.
    • Between 20 and 99 redundancies requires 30 days’ consultation.
    • 45 days if you are making more than 100 employees redundant.
    • There is no time period if you are making less than 20 redundancies, but still consult with people, whether this is individually or collectively.
  • Take a look at what ACAS says about consultation and read up on current law around redundancy before then training your managers/HR teams.

DO NOT

  • Jump the gun and announce who is leaving the business before you have done the consultation.
  • Treat consultation as a paperwork exercise. It has to be a genuine exercise in gathering information, feedback and ideas.
  • Consult with your staff reps if your decisions are already made and the process is nothing more than a tick box exercise (that approach does not fulfil the requirements of the law).
  • Vaguely announce what is happening and think you can get away with calling that consultation.
  • Neglect to inform your managers and HR team that what they are discussing with representatives and then with individuals in consultation meeting are ‘proposals’ – nothing is decided and not open to discussion, until the final meetings with an employee.
  • Forget those employees who are currently out of/away from the organisation.

And Remember

There is a lot of planning involved as you can read from the above so don’t just allow yourself a few days to get it all sorted. It’s a full project, so treat it as seriously as you might any other business project.

From Jaluch…

Redundancy is not the process to use to get rid of a problem employee. Do this, and you could find yourself in a tribunal! Why not take a look at some of our other HR Blasts:

We offer the following:

Training for staff reps – wanting to keep costs down? Here’s a training kit for you to ensure your staff reps are fully up to speed (not sure about a training kit, well Jaluch can deliver it for you instead – just ask!)

Discipline and Dismissals training for line managers – delivered by us – also available in training kit form

Essential employment law for managers – delivered by us (no training kit available)

Change Management – delivered by us but also available as a training kit

Contact us if you’re interested in any of the training options above.

The information contained within this article is for general guidance only and represents our understanding of employment and associated law and employee relations issues as at the date of publication. Jaluch Limited, or any of its directors or employees, cannot be held responsible for any action or inaction taken in reliance upon the contents. Specific advice should be sought on all individual matters.

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