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Preparing For Redundancy: Balancing Purpose & People With Profit

As a conscientious employer, like us, you’re led by your values and guided by a moral compass. And doing the right thing sits at the heart of your organisation’s decisions. Yet it’s not always easy. Preparing for redundancy can be an ethical dilemma, balancing the health of the organisation with the wellbeing of your employees. But handled with a level of humanity, you can make the process as pain-free and positive as possible for everyone involved while securing a future for your business and the loyalty and support of remaining staff.

Is a fair redundancy process enough?

While UK redundancy law prescribes a legal and fair process, doing the right thing is also left to your discretion. Like you, we believe in doing right by employees, and when it comes to redundancy, it calls for an ethical approach. In practice, that means it’s person-centred. It’s led with empathy, and compassion runs through every part.

There is extensive guidance and advice available for employers on the legal requirements of a fair redundancy. But this can quite easily turn redundancy into a tick box exercise and it is easy for organisations to lose sight of the real people affected and the gravity of the impact of their decisions.

The case for ethical redundancy

The link between workplace restructures and mental wellbeing are well documented. Facing redundancy puts a strain on professional and personal relationships, and can cause feelings of anxiety, depression, and trigger other mental health conditions. So putting employee wellbeing front and centre from the start of the process goes without saying.

Making counselling and support available throughout the redundancy process can help even the most resilient employees cope better with the situation, support them to make sound decisions about their future, and ultimately safeguard their mental health.

However, ensuring the wellbeing of employees going through the redundancy process shouldn’t be the sole focus. Those making difficult decisions that will impact the lives of their fellow employees, face tough choices, and chances are they’ll be managing the process too. It’s one of the most emotionally exhausting challenges of leadership. Training, guidance, and support are crucial to help them make fair decisions and show sensitivity towards the people involved.

The impact of restructuring and redundancy extends to employees retaining their role too. Higher levels of sickness absence, increased job insecurity and poor mental health are common. By factoring in open and honest communication, support such as coaching and counselling, and active employee participation in managing their mental health, you can minimise any negative impact on workforce morale and wellbeing.

Planned process for redundancy during a global crisis

Wellbeing in the workplace is in the spotlight right now and implementing a redundancy process, especially during a pandemic, puts your organisation and its values to the test. It also adds a layer of complexity. Remote working risks a less personal, person-centred process, and ensuring furloughed staff facing redundancy feel the process is fair must be a focus. Your planned process for redundancy has never been more under scrutiny. Additional guidance written for COVID times stipulates alternatives to redundancy must have been explored and exhausted, ideally with the involvement of unions and employees, before a process is instigated.

You can learn more about COVID-related complexities here.

Five principles to help you do the right thing

Exploring all possible alternatives to redundancy has been highlighted in a joint statement from ACAS, CBI, and TUC in relation to preparing for redundancy. Further, they’re calling on all employers to get the process right by following five principles – all in line with an ethical redundancy approach.

1. Do it openly

There are rules for collective redundancies (those involving 20 or more staff), but whatever the scale, the sooner people understand the situation, the better for everyone.

2. Do it thoroughly

To understand what’s happening, people need information and guidance. Have you trained your staff representatives in how it all works?

3. Do it genuinely

Consultation means hearing people’s views before you make a decision, so be open to alternatives from individuals and/or unions, and always feed back.

4. Do it fairly

All aspects of your redundancy procedure should be conducted fairly and without any form of discrimination.

5. Do it with dignity

Losing your job has a human as well as a business cost. The way you let people go says a lot about your organisation’s values. Think about how you will handle the conversation – whether it’s face-to-face or remote. And remember, you may want to rehire the same person in the future.

Helping you apply these principles

At Hodge Jones & Allen we want to help businesses do redundancy legally and ethically. Hard decisions can’t be avoided, but they can be made in the right way. We have therefore prepared a series of three articles with practical tips and guidance to help you apply the above principles. These focus on the areas where extra effort will make the process more positive for everyone:

  1. Planning
  2. Selection
  3. Suitable alternative employment

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 us 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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