The latest CIPD/KPMG Labour Market Outlook survey predicts 59% of UK organisations plan to make redundancies in the next three months. The redundancy process has always been a minefield for employers and getting it wrong can prove costly. What are the main pitfalls and how can they best be avoided?
Breaking bad news is never easy, but employers often leave themselves open to claims from the outset by handling the announcement badly. Peter Vreede, principal at consultancy Redundancy Assist, explains: "Too many redundancy plans seem to be rushed and put together overnight. It's not surprising they are subsequently found wholly lacking when scrutinised, setting the stage for legal challenges when brought to employment lawyers and, ultimately, employment tribunals.
"On the day a company announces its intentions, the strength of the plan will be evident to all. Employees will measure the success of the downsizing exercise on how well initial communications are handled. Everyone will have questions they want answered before they go home."
All managers should be fully briefed and trained to answer potentially difficult questions and the company should compile a carefully worded statement for the local press, advises Vreede.
Employers must devise a fair and transparent assessment process to work out which people to let go, and be prepared to justify this at an employment tribunal.
But Rebecca Lake, an employment solicitor at Davenport Lyons, says organisations often use subjective methods, such as poor performance, to select staff for redundancy.
"Companies should add some objective criteria into the mix such as attendance, disciplinary record and length of service. If using subjective criteria, try to collate evidence to support any score awarded, such as appraisals or staff and client feedback," she says.
As an employer, you must have clear and objective evidence to back up any record of poor performance. Asking two managers to individually score any employees in question is a way of obtaining an objective viewpoint, advises Lake.
Don't forget those on leave