A redundancy situation is understandably an incredibly emotional and stressful time for those employees involved, however it is also a difficult time for the employers handling the process. We asked Luke Welsh, Employment Law expert at JCP Solicitors, to explain more:

Many businesses have faced, or will at some point be faced with, a genuine redundancy situation. This means that particular roles in question are no longer required or fewer people are needed for work of a particular kind, or the workplace is to close down altogether.

This can be a complex time for both an employer and their employees, due to the procedures and guidelines to get your head around.  It is important to know that as well as the formal redundancy process that must be adhered to, there are also other options to consider. These include:

Voluntary Redundancy

Although there is no obligation on an employer to consider offering voluntary redundancies, there may be employees who are willing to accept voluntary redundancy, which in turn could reduce the effect of compulsory redundancies on the morale of the workforce.

Employers can reserve the right not to accept all voluntary applications which would avoid the business losing key staff or more staff than the proposed number of redundancies.

If an employee opts for voluntary redundancy and is subsequently not selected, the fact that they volunteered must not be taken into account if the business looks to make any further redundancies in the future.  However in the event that an employee’s application is accepted, their termination will still be considered as a dismissal rather than a resignation.

Alternative Employment

An employer must also consider whether they have any suitable alternative positions available within their business to offer to those at risk of redundancy.  The suitability of an alternative position depends on a number of factors ranging from expected pay, skills required, and the terms of the new position in comparison to the terms of an employee’s current position.

If an alternative position is available and offered to an employee, the employee is entitled to a four week trial period from the date of their anticipated redundancy in the new position, and the trial period can even be extended to another four weeks if both parties agree.

If the trial is successful, an employee will then continue in their new role and their redundancy is deemed to never have happened. Yet if the trial isn’t successful, the employee’s redundancy will unfortunately stand.

It is also important to note that if an employee refuses an offer of suitable alternative employment, they will still be considered as being dismissed by the employer; however they could also lose their right to their redundancy payment.

Compromise Agreement

Some employers offer those at risk of redundancy an inflated redundancy package on the condition that they sign a Compromise Agreement.

Upon an employee signing such an agreement, they confirm that they will not pursue an employment related claim against their employer. This provides the employer with the comfort that they will not receive any claims against them as a result of the redundancies.

One of the requirements necessary to ensure the validity of a Compromise Agreement is that the employee has received independent legal advice on the terms of the agreement.  Although it has become increasingly common for the employer to make a contribution to the employee’s legal fees in this respect, it is not a legal requirement to do so.

For more information on the Employment Law services offered for Employers and Employers at JCP Solicitors, please contact Luke Welsh on 01792 525400, email luke.welsh@jcpsolicitors.co.uk or visit www.jcpsolicitors.co.uk