Unsurprisingly, the current economic down turn has led to a burst of redundancy related claims and so we thought it would be helpful to summarise the key steps involved in redundancy in light of recent Tribunal decisions.

Selection

If it is proposed that a proportion of a pool of employees will be dismissed as redundant then it will be necessary to carry out a selection process using fair and objective criteria in order to determine which employees in the pool are at risk of redundancy.

It is important to ensure that the selection criteria chosen do not place a person or group at a disadvantage that may result in discrimination. Employers are advised to avoid using length of service or “last in first out” as a stand-alone criteria due to the risk of age discrimination and, where criteria such as attendance is used, employers are advised to make adjustments for employees on long term sickness absence or women on maternity leave due to the risk of disability or sex discrimination.

Eversheds, a large international law firm, were recently subject to a claim for sex discrimination due to the selection criteria they used in a redundancy process. Their selection criteria included the amount of working time recorded and the proportion of that working time converted into bills during the financial year. This would have been fair, but for the fact that there were only two people in the selection pool and one of them was on maternity leave for most of the financial year in question. Rather than adjust the selection criteria to look at an earlier financial year or the proportion of the financial year before the maternity leave commenced, Eversheds gave the employee on maternity leave the highest possible score for those selection criteria with the result that the other employee scored 1 point less than her and was dismissed as redundant. He brought a claim for sex discrimination and succeeded.

Consultation

Employers are required to carry out a consultation exercise before reaching a final decision on redundancy. The purpose of the consultation is to discuss the reasons for the proposed redundancy(ies) and ways in which the need to make the proposed redundancy(ies) may be avoided altogether or reduced – this will include consideration of redeployment to suitable alternative vacancies. Where a selection process has been carried out the consultation will also include discussion of the selection criteria used and scores attributed.

This consultation will usually be directly with the affected employees and may be carried out over two or three meetings. However, where it is proposed that 20 or more employees will be dismissed as redundant within a period of 90 days or less, employers are required to consult with elected employee representatives for a minimum period and to inform the Secretary of State for Business, Innovation and Skills.

Agency Workers Regulations

Since the introduction of the Agency Workers Regulations, where it is proposed that 20 or more employees will be dismissed as redundant within a period of 90 days or less, the employer must provide the elected employee representatives with information about the number of agency workers engaged, the parts of the business in which the agency workers are working and the types of work agency workers are carrying out.

Redundancy and Maternity Leave

A common misconception in redundancy situations is that an employee on maternity leave cannot be dismissed as redundant. This is not the case and, as can be seen from the Eversheds case above, it is not advisable to give an employee on maternity leave an advantage over other employees in a selection process.

However, where an employee on maternity leave (or adoption leave or additional paternity leave) is facing redundancy there is a requirement to offer them any suitable alternative vacancy that is available and so if there are suitable alternative vacancies then these employees will effectively be at the front of the queue.

Redundancy an be a complicated process and it is important to get it right in order to avoid claims for unfair dismissal or discrimination. Eaton Smith are able to provide step by step guidance in order to get you through your redundancy procedure and minimise the risk of a claim.

For more assistance with this or to discuss our employment law support packages then please contact Kate Booth on 01484 821309 or katebooth@eatonsmith.co.uk
Posted Thursday 15th of March 2012