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Planning an ethical redundancy: The four questions you can’t afford to ignore

Planning a redundancy can feel daunting, especially when you’re committed to doing the right thing by your people yet need to manage the commercial realities. As a conscientious employer ourselves, we understand. That’s why we always advocate ethical redundancy. However, planning an ethical redundancy requires more than simply following laws set out to ensure genuine redundancy and a fair process. It puts people first, even in the preparation and planning stages. When we consider every decision we make has the potential to put a family into hardship, it reminds us of the gravity of the process. And it reinforces the need for thorough planning that prioritises what’s best for people as well as the business.

Four questions to consider when planning an ethical redundancy

1. What are the alternatives to redundancy?

When times are hard, redundancy can seem like a quick and easy fix. But it can be expensive and counterproductive as you start to recover from the downturn. Some alternatives could be less costly and give you the flexibility you might need as business begins to boom again. Importantly, some options will minimise the impact on your people. Many of the alternatives may appeal to your employees whether their role might be at risk or not. So having an honest discussion with staff and getting their input could not only avoid redundancies but stabilise your business too. Options could include:

  • Agreeing temporary or permanent changes to working arrangements/remuneration
  • Pay/bonus deferral schemes
  • Removing overtime
  • Reallocating resource across the business
  • Sabbaticals
  • Making greater use of flexible working
  • Reducing the use of agency staff
  • Secondments to other companies

2. How will we retain good relations with our workforce?

There’s nothing more likely to cause ill-feeling than keeping employees in the dark. An already anxious workforce will have questions. There’ll be rumours and assumptions with the potential to cause unrest and unnecessary additional stress. In fact, many of the enquiries we receive from employees result from employers failing to explain the rationale for redundancies and their planned process. That’s why every good redundancy plan sets out what, how and when you’ll share updates, consult and feedback. If it’s a large or complex redundancy situation, wherever possible – even where numbers impacted don’t trigger legal collective consultation obligations – you should go one step further and work with staff representatives to develop your plans.

3. How will we ensure a fair selection process?

It’s important to keep in mind that roles are made redundant, not people. Many businesses put themselves at risk of unfair and unlawful decisions by basing their selection process on who they want to keep and who they’d like to leave the organisation. Fortunately, the ethical approach is good for the health of your business. It starts with assessing the best staffing structure to meet the organisation’s needs and balancing it against the budget available for salary. By then matching people to roles based on those best suited, you can be confident of a fair selection process.

4. How will we involve employees currently out of the business?

It’s easy to miss out staff on sick leave, maternity/paternity/shared parental leave, or other planned absence. And you’ll likely need to make special arrangements to ensure they’re part of the process. So it’s a good idea to consider how you’ll keep them involved right from the start and set out your plans in the communication document mentioned earlier. Out of sight must never be out of mind when it comes to redundancy.

Positive for business, positive for people

Our employment law solicitors help business owners like you make commercial changes legally while helping you uphold your principles and do the right thing by your people.

Call on 0808 252 5231 or request a call back for a free and confidential discussion with one of our employment law specialists.

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