Managing Redundancies

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Are you a small organisation having to make some redundancies? Here we will help guide you through taking the necessary steps to make the process as easy as possible.

It is important to remember that the redundancy is about the role and not the individual. This can be split into two categories:

Single Role

Where there is only one employee carrying out that work

What does this mean?

It would be clear which individual in the business would be selected for this redundancy.

Same role carried out by multiple employees

This could be a role such as Accounts Administration

What does this mean?

Unless you are closing the whole department, you would need to use a selection criteria to score each team member in that pool.

The consultation process

Consultation is a critical part of the process, there is no set time period for consultation. Two weeks is usually an appropriate period of time for individual redundancies.

What are my employees rights?

Employees have a right to be accompanied at all formal consultation meetings by a colleague or trade union representative.

Are my employees entitled to redundancy pay?

Employees with 2 years full, continuous service are entitled to a tax-free redundancy payment. The cost of this is borne by the employer. Any employees with under 2 year’s service are not entitled to payment, but you may choose to offer one.

What are the types of redundancy pay?

Statutory redundancy pay is calculated by the following: 

  • Age at termination date
  • Weekly salary capped at £538
  • Length of service

This handy government calculator is excellent.  Link below. 

Enhanced redundancy pay is either a discretionary payment that an employer can choose to make, or it may be a contractual right written into your employee’s contract. For example, you might top-up the statutory payment for anyone taking voluntary redundancy.  

For more information please call us on 01462 511 100 and we will be happy to answer your questions.

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