Rightsizing the Right Way
The COVID-19 pandemic has affected the lives of every single person in the UK. Many have lost loved ones, been ill or been key workers going to work in circumstances unimaginable to the rest of us.
Those of us lucky enough not to have been affected directly by the virus in this way will however be experiencing the economic impact COVID-19 has had on business. This may have been in the form of pay cuts, being placed ‘on furlough’ or job losses. Since the start of the pandemic in the UK over 700,000 people have lost their jobs. Unless the Job Retention Scheme is extended in some form after October a ‘tsunami’ of further redundancies is feared. Or you may be a small business owner faced for the first time with ‘letting people go’.
In Shropshire we have primarily a small business economy with the number of self-employed people higher than the national average. A recent survey of more than 2,000 small business owners in the UK reported that more than half were not confident in making redundancies ‘in line with the law’.
Usually a business is considered ‘small’ if it employs less than 50 people. There are some differences around redundancy process depending on the numbers affected – there is no set statutory procedure for small scale redundancy programmes although best practice set by ACAS is highly recommended to avoid claims or tribunals
These are our tips – but please do check with an HR professional before implementing for your business.
- Establish whether you are required to follow the statutory procedure – this will depend on the numbers of people affected (20 or more)
- Treat your people fairly and act in accordance with their contract of employment and legal redundancy rights
- Remember it is the role not the person that is being made redundant
- Explore every other option before making the decision to make a role redundant
- Have a firm business case evidencing that redundancy was the only option available
- Give people as much notice as possible and explain the reasons for the redundancies
- Select employees affected fairly and objectively using fair and robust criteria
- Allow your employees to consider the proposals and ask questions during a period of consultation – you are required to consult with your people before dismissing them on the grounds of redundancy
- Have a series of meetings with your affected employees (usually three) the first advising the employee they are at risk, the second allowing the employee to propose alternatives to redundancy and the third to confirm the outcome
- Confirm the outcome in writing (called redundancy notice) and ensure you adhere to the statutory notice periods
- Have an internal appeals process to mitigate against tribunal claims
- Take advantage of support available online and in your local business community (local Chambers of Commerce, business networking groups, online forums, LinkedIn, ACAS etc)
- Give support and training to those people leading the consultation meetings and recognise how challenging this will be for them
- Do consider how you can support those being made redundant in finding new roles
- If possible, offer outplacement support this not only helps the employee navigate the jobs market with confidence but also protects your employer brand and reduces risk
- Forget to keep written records of meetings
- Expect your people to maintain ‘business as usual’ productivity during this time – they will be concerned about the future and the uncertainty will impact their performance
- Forget to allow those entitled to it – reasonable paid time off to look for work
- Be surprised if you lose some people because they have found alternative employment
- Deviate from the process halfway through – unless you have a very good reason to
- Stop communicating
- Forget to think about the future – how you treat people during a redundancy process will affect both your brand and employer brand (especially in a small community)
- Forget the rest of the employees within the business and their emotions, ensure you communicate with this group also about what changes may mean for them