When considering making an employee redundant the employer has to consider a number of factors. The first is whether a redundancy has genuinely occurred (i.e. the work of a particular kind has ceased or diminished), who should be selected to be at risk of redundancy, and then as part of a redundancy consultation procedure, the employer has to consider alternatives to redundancy.

Alternatives to redundancy may be a number of things and there is no set criteria as to what the employer has to consider. This therefore allows some flexibility for the employer. Common alternatives include:-

Alternative employment

The employer is obliged to consider alternative roles within the company or any group which might be suitable for the at risk employees. Searching for alternative employment is particularly important because the dismissal of an employee for redundancy may be unfair if the employer fails to make a reasonable search for suitable alternative employment. It is not a requirement that the employer has a duty to make every possible effort to look for alternative employment, but you must make reasonable efforts. Searching for alternative employment may include trial periods.

Certain classes of employees such as those on maternity or shared parental leave have an automatic right to be offered any suitable vacancies. For employees on maternity leave, this period of special protection occurs from the time the employee notifies the employer of her pregnancy until 6 months after the end of maternity leave.

Other cost saving measures

The employer has an obligation where the reason for redundancy is cost saving to consider if the other cost saving measures may avoid redundancies. However, given that for most employers staffing costs are one of the single biggest overheads, it may be that insufficient savings can be made elsewhere.

Short time and layoffs

Broadly laying off employees means that they are provided with no work (and therefore no pay) for a period. However they remain as employees, and therefore they have not been dismissed. Short time working means providing the employees with less work and therefore less pay whilst retaining them as employees. Unlike dismissal, this is a temporary solution.

When considering layoff or short time working, it is important to take proper advice as the employee’s contractual and statutory rights differ depending on whether or not you have a contractual right to enforce layoff or short time working.

Consultation

Employees themselves may in the process of consultation propose cost saving measures for example job share or shorter or adjusted hours, or reduction in salary. Reduction in salary may assist the employer but it is difficult to enforce as part of a redundancy consultation procedure, unless the employee agrees to it. Employers may wish to record that agreement in a settlement agreement, and should take specific advice on doing so.

If you require any advice in relation to redundancy procedures or alternative redundancies please do not hesitate to contact Arvin Sandhu on 01494 521 301.