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Business Restructuring & Reorganisation

As an employer, if you need to consider making employees redundant, you must ensure that you follow a fair and genuine redundancy consultation process with your employees. Before embarking on any redundancy procedure or company restructure, you should also consider whether to give employees the opportunity to apply for voluntary redundancy.

Employment Law and Redundancy Consultation

If you face the unfortunate prospect of making an employee redundant, it is important to ensure your business follows a fair redundancy consultation process in line with employment legislation, whatever the size of your organisation: 

Once you have identified if someone is in a unique post or, alternatively, the pool of potentially redundant roles, you must consult with the affected employees. Consultation involves explaining why redundancies may be necessary and why their roles are affected, and looking for ways in which to avoid their redundancy, for example reducing working hours or alternative employment.

If there are a number of people in a particular area, you may have to decide on selection pools and then consider how to decide who from the pool will be selected for redundancy. This is generally done by scoring employees against a set of criteria agreed with the employees at an early stage of the redundancy consultation process.  Under employment laws the criteria must be fair, objective and not discriminatory in any way. ‘Last in, first out’ is unlikely to be a fair method of selecting who should be made redundant unless there is no other way to choose between the employees, for example if they have exactly the same skill set, attendance record, and so on.

If you think it may be necessary to make 20 or more employees redundant at one work site within 90 days (‘collective redundancies’), a more stringent redundancy consultation procedure is applicable. This requires you to consult not only with the potentially affected employees but also with any relevant trade unions or employee representatives for a minimum period of 30 days (this is increased to 45 days if it is 100 or more employees).

You also have an obligation to notify the Department of Business, Innovation and Skills by submitting a HR1 form.

You should always take legal advice when you are contemplating collective redundancies.

How can Thorntons help?

At Thorntons, we can help you to manage business restructuring and reorganisation by giving you and your managers the tools you need to properly manage the redundancy or reorganisation processes.

We have extensive experience in advising employers of all sizes and from a wide range of sectors on how to manage redundancy procedures and business restructuring with minimal effect to employee morale and reputation. We can also assist in the calculation of redundancy payments and redundancy notice requirements. Taking advice on the redundancy consultation process at an early stage can help you to avoid making costly mistakes under UK employment laws, which could result in claims in the Employment Tribunal.

Our Employment lawyers can provide tailored business consultations to equip you and your managers with the skills and knowledge to reorganise and restructure your business as and when it is needed. We can also help you to draft redundancy templates, letters and policies, as well as voluntary redundancy schemes.

In most employment situations taking legal advice early on can often stop the situation from escalating and will save you time and money later. With our proactive and commercial advice on restructuring your business, Thorntons Employment Law team can help find the right solution for you over redundancy and reorganisation issues. Give one of our team a call on 03330 430 350, or complete our online enquiry form and we will contact you