First redundancy consultation letter

Redundancy law is much more complex than paying an employee off. There must be a genuine redundancy situation and you must treat the employee fairly in the procedure you use prior to the dismissal decision being taken. The starting point is to explore whether compulsory redundancies can be avoided, for example by asking for volunteers, or considering other cost-cutting measures.

Definition

You cannot use redundancy as a tool to remove a poorly-performing or troublesome employee. According to the statutory definition, there are four situations which could give rise to a redundancy:

• the closure of your business

• the closure of a place of work where the employee is employed

• a diminishing requirement for an employee to carry out work of a particular kind

• a diminishing requirement for an employee to carry out work of a particular kind at the place where an employee is employed.

If the reason for the redundancy fits into one of these categories, it will be a potentially fair reason to dismiss. However, it could be made unfair if you fail to follow a proper procedure or otherwise fail to act reasonably. The principal procedural errors made by employers are firstly, lack of meaningful consultation, secondly, the unfair selection of an employee for redundancy and thirdly, failure to consider the employee for alternative employment that may be available.

You must carry out redundancy consultation with individual employees. This must take place regardless of the number of proposed redundancies. A series of individual meetings with each of the affected employees should be held and this includes not only the ones who might be redundant, but those who are expected to stay. It is also best practice to hold a general staff meeting to discuss the business reasons for the proposed redundancies. Consultation must be fair and should involve giving the employees a full and proper opportunity to understand the matters about which they are being consulted and to express their views on those subjects.

Consultation should begin before you have reached a firm view as to whether redundancies should take place. You will no doubt have proposals as to which groups of employees are to be considered for redundancy, how employees are to be selected from within those groups and the number of employees who may need to be made redundant. These are typical matters that should be discussed as part of the consultation exercise. Volunteers for redundancy should be called for if possible. Use our First Redundancy Consultation Letter to ask for volunteers for redundancy, to request the workforce to think about and put forward their own proposals to try and avoid the redundancy situation altogether, or at least to reduce the need for redundancies, and to consult on your proposed criteria for selecting employees for compulsory redundancy, should that later become necessary.

Collective consultation

If you’re proposing to make 20 or more redundancies at one establishment within a 90-day period, you are under statutory obligations to consult with either recognised trade unions or, if there is no recognised trade union, with employee representatives and also to notify the Redundancy Payments Service using an HR1 Form. The provisions are too detailed to be discussed here but be aware of their existence and always seek specific legal advice where you’re affected.