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Making Employees Redundant
Making Employees Redundant

What are the Alternatives to Redundancy?

What are the Alternatives to Redundancy?

We often have clients who contact us about making employees redundant and our first question is always “is it really a redundancy?”

For many employers, redundancy can seem to be an easy option to deal with all manner of situations. A key part of our job is to make sure that this would be a fair redundancy and that redundancy is really what’s needed.

Inappropriate or Unacceptable Reasons for Redundancy

Common ‘redundancy reasons that aren’t really redundancy’ include:

  • trying to find a soft option for the person who needs to leave the organisation for capability reasons
    • “If I make them redundant, maybe they won’t take it personally and make a claim…”
  • trying to avoid that really difficult performance conversation
    • “If I make them redundant, then I won’t have to make them (and me) feel bad by pointing out that they aren’t very good at their job…”
  • trying to find the quick or easy option rather than go through a complicated redistribution or reorganisation of work
    • “If I make redundancies, then can I avoid lots of upheaval and start again with new employees?”

Genuine Reasons Companies have for Redundancy

The only fair reasons for redundancy are:

  • the employer has ceased or intends to cease carrying on the line of business for the purposes of which the employee is employed;
  • the employer has ceased or intends to cease carrying on the line business at the place of employment where the employee is employed;
  • the needs of the employer have changed such that the requirement for employees to perform the work has ceased or diminished for the particular kind of work performed by the employee;
  • the needs of the employer have changed such that the requirement for employees to perform the work at the place of employment has ceased or diminished for the particular kind of work performed by the employee.

Risks of Business Conducting Fake Redundancies

Redundancies should never be undertaken unless one of the above reasons genuinely apply as this will be considered unfair dismissal by an Employment Tribunal.  And you really want to avoid an Employment Tribunal as they are typically high cost (the cost of both the process and outcome), time-consuming and in the public eye.

In addition to the potential unfair treatment of an individual, unnecessary redundancies are a risk to the business as they may:

  • damage the reputation of the business as clients (and competitors) perceive issues regarding performance of your business;
  • consume considerable time of the business leadership;
  • be upsetting for remaining employees and raise concerns about future redundancies.

Alternatives to Making Employees Redundant

We encourage our clients to be completely honest with us about their reasons for considering redundancy, so we can introduce a more suitable process that they may not have considered.

For example, it may be more appropriate to identify a need for

  • an effective poor performance or redevelopment programme,
  • a capability process or
  • a restructure where they can redesign jobs for the great employees they already have.

We recommend that before you embark on a redundancy course of action, you consider whether redundancies are really necessary.  If you want objective advice, a fresh perspective or support with the legal and practical aspect of redundancies, we’re more than happy to help.

Please note: Managing redundancy is difficult and whether with Lighter HR or another provider, we strongly recommend you use an experienced HR professional to guide you and make sure you do everything you are supposed to do.