Managing Redundancies

Breaking the news


When announcing redundancies, create a clear and consistent message to relay to staff and bear in mind that the reaction of most people will be to panic and assume it will affect them. To prevent valuable skills and knowledge flooding out of the organisation, ensure any planned financial retention arrangements and career transition support is communicated at the same time as news of job cuts.


Explaining the process


Clearly explain the business reasons behind the decision to make the redundancies, the selection criteria to be used, the timelines involved and severance arrangements.


Communication should be formal and regular, whether delivered via news bulletin or face-to-face. Even if you have little to say, say it. For example, if you're hoping to generate enough voluntary redundancies, but aren't yet sure if you will need to make compulsory redundancies, far better to say a decision has yet to be taken and when it will be made, than nothing at all. Any silence is likely to be interpreted as the worst-case scenario, impacting negatively on morale and productivity.


Ensure line managers and supervisors are briefed in advance and given support to prepare for the questions that they will be asked. Provide coaching where possible, so that they are equipped to discuss the announcement and deal with any emotional fallout.


Maintaining performance


While most redundancy packages or compromise agreements might be enough to keep people in their roles until the cut-off date, it won't be enough to keep them motivated to perform. To prevent a major dip in customer service and productivity, try and make anyone selected feel like it's an opportunity to move onto better things - not the end of their world. Providing a budget for career counselling, to help individuals think about and plan their future, will prove a sound investment.


Supporting leavers


Support to help employees secure a new future can range from providing access to valuable resources during work time, to bringing local employers or recruitment agencies on site to advertise current vacancies. You might also consider running CV-writing and self-employment workshops or work with a dedicated outplacement provider to offer one-to-one support and keep their job search on-track.


The benefits to the business, in terms of reducing the cost of lost productivity, will more than outweigh the costs. It will also send a very positive message to remaining employees should they fear redundancy in the future.


Working with unions


The normal reaction of the unions will be to resist any loss of employment and challenge the selection criteria. Your role is to recognise that union representatives are just as, if not more, likely to be approached by employees seeking reassurance about their future. Therefore, involve them in the briefing process and provide them with the same information and support to answer employees concerns and worries as managers. By giving union representatives an opportunity to access information and become a part of the support process, you will help them to help address any employee concerns or worries.




Plan ahead


Although pressure to make quick job cuts may be intense, step back and think about how best to retain business critical skills and people, without incurring unfair dismissal claims.


Set a timeline


As far as possible, create a clear timetable of events and stick to it. The more clarity you can provide during this time of uncertainty, the less people will be prone to panic.


Support managers


Brief line managers and supervisors ahead of making any announcements and help them to develop answers to any questions they anticipate being asked by employees.


Provide reassurance


Don't assume that those employees not directly affected by redundancy won't take fright and take flight. Encourage the senior management team to reassure critical people.


Engage survivors


Maintain regular communication with employees across the business after the exercise is complete, to address concerns about their role and the future of the company.


The procedure for carrying out redundancies is broadly as follows:
Employers must consult with all employees who may be affected by the proposed redundancies giving as much warning of the impending redundancies and ensure a fair procedure is followed.


This procedure must comply with the minimum requirements regarding dismissal set out in the statutory Dismissal and Disciplinary Procedures. A failure to follow these statutory requirements will make the dismissals automatically unfair.


Adequate information regarding the reasons for the proposed redundancies must be given in good time in writing to allow employees to respond.


Consideration must be given to any points made by employees and throughout the process consider whether there is suitable alternative employment that may be available for the employee.


It is essential that a fair and objective selection process is agreed and applied. This is in three stages:

• the selection of the pool of employees from which redundancies will be made;
• the selection criteria to be applied to them; and
• the manner in which the selection criteria will be applied.

Selection Pool


Consider employees who are doing the same or similar work as the group from which it is first considered that redundancies will be made or whose skills are interchangeable from one department (or establishment) to another. Also consider those working on different shifts but who essentially are carrying out the same work.


Selection Criteria


Employees should be assessed against selection criteria and allocated marks for each one. The marks may be weighted according to the importance of each criterion to give an overall mark for each employee. The scores must be applied in a fair and objective manner.


Consultation with the Employee


The employee should be invited to a first consultation meeting at which the individual should be informed that their role is ‘at risk´ of redundancy. 


Particular care should be taken to avoid giving any impression that a decision has already been made. The employee should be informed as to the reasons for needing to make redundancies and should be asked to consider whether there are any options as alternatives to redundancy that they would like the company to consider before making a decision on the issue. Employers should also inform the employees that they will consider whether there are other opportunities or vacancies which can be offered to the employee by way of suitable alternative employment.


After an adequate period of consultation a second meeting will be held and if there are no alternatives to suggest and other issues have been adequately dealt with then the employee should be informed that their role is redundant and an explanation given to them as to what they will receive by way of severance pay. If there are any alternatives to consider, then it may be necessary to adjourn to reconvene for a third time to consider the employee’s proposals.


Where employees are in a ‘pool´ for selection purposes they should be informed of the scores that they have been given and should be given an opportunity to challenge those scores prior to any decision on their role being made.


Employers should not forget to offer the individual the opportunity to appeal against the decision and should follow up the final meeting in writing confirming the decision.


Every employee who is put at risk of redundancy and indeed many others who are not will inevitably be unhappy. If, however the process is managed properly then they will hopefully recognise that they are being treated fairly. This is important not only in mitigating the risk of a tribunal claim but also maintaining the morale of those who remain.