Redundancy is without doubt one of the most difficult situations to deal with as a business owner. For a small or medium sized business where you have relationships with your employees, the idea of having to lose one or more can be heartbreaking.
Having said that, it can be tempting to look at redundancy as a way of resolving performance-related issues because saying the role no longer exists can be easier than saying that the person isn’t doing very well in the role.
It’s important to realise that there are two parts to a redundancy that can and will be scrutinised closely. The first is the legitimate business reason, i.e. ensuring that the redundancy is genuine and not “trumped up” to hide a different issue.
According to the Employment Rights Act 1996, an employee is dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to the fact that:
- the employer ceases to carry on the business in which the employee was employed;
- the employer ceases to carry on that business in the place where the employee was employed;
- the needs of the business for employees to carry out work of a particular kind cease or diminish; or
- the needs of the business for employees to carry out work of a particular kind in the place where the employee was employed cease or diminish.
The second part that is subject to review is the process that’s followed which is why it’s extremely important to seek advice and to ask for help early before you get into any serious discussions about the future of a role or roles.
However, if the real issue is performance, there’s a correct way to handle that too!
The Simple Take Is: Consult an expert before you start discussions with staff or any process.
If you need support on a potential redundancy situation or any other HR challenge contact us on 01487 815720 to talk it through with one of our HR Experts.