The effects of a failed redundancy process hit the headlines as former Comet staff each received protective awards.

The effects of a failed redundancy process hit the headlines as former Comet staff each received protective awards.

These were awarded for their former employer’s failure to comply with collective consultation obligations during a large scale redundancy.

Redundancy can be a daunting process; both for employers and employees. Employers need to ensure that they apply and follow procedures correctly and fairly; observing all applicable time limits. Eligible employees (i.e. those with requisite length of service) have rights in a redundancy situation and both parties need to understand what these are.

In simple terms, redundancy is a fair reason for dismissal when applied to three situations: business closure, workplace closure and workforce reduction.

Any redundancy procedure is prescriptive and problems can arise at any point. Employers should take initial steps to avoid redundancy prior to implementing any process. i.e. reduce overtime, suspend recruitment, reduce use of agency workers, reduce working hours.

Once underway, a good process will see employers identify an appropriate pool of at risk employees; consult with affected individuals; apply an objective scoring criteria to each individual and consider whether there would be any suitable alternative employment within the organisation.

Redundant employees are entitled to several, or one cumulative, payments on termination. Various calculations need to be done by employers to ensure these are correct, with all contractual payments due up to the effective date of termination, i.e. salary, notice period, accrued unused holiday, reimburse expenses, paid without undue delay.

Where 20 or more employees are to be dismissed, employers come under a duty to collectively consult with those affected. Consultation has strict time limits, and employers must also comply with notification obligations -  employee representatives, unions, Secretary of State - at various checkpoints during the process.

Any procedural breach of these obligations gives rise to a protective award of up to 90 days’ pay per employee.

To cover their backs as best as possible, employers must do everything they can to show that any redundancy is not a foregone conclusion. Any process should be treated as a negotiation, rather than an exchange of competing views.

Thomas Gibby, trainee solicitor at Thomas Eggar LLP