Understanding The ACAS Redundancy Process For Employers

Redundancy is a dismissal due to a reduction or complete cessation of work. Depending on the company’s circumstances, redundancy can affect individual or many employees.

When you have a solid business reason for contemplating redundancies, you are ready to begin the ACAS redundancy process.

The procedure for making someone redundant should be a last resort. If the reason is financial, consider all other means of cutting costs before resorting to the legal redundancy process.

Consider the following:

• Have you considered if laying off or short-time work is more appropriate?
• Do any of your staff wish to reduce their hours voluntarily?

If you are looking at restructuring to make the organisation run more efficiently and costs are not necessarily the driving factor, you may have identified a role/s which are no longer required, therefore:

• If any of the roles are remaining, where will they be going? If an existing employee is to absorb this work, can it be done without placing extra strain on them?
• Can The Employee At Risk Of Redundancy Do The Role On A Reduced Part-Time/Job Share Basis?

Having a sound business case ensures the focus stays on the business reasons for redundancy and doesn’t stray into the danger zone of WHO is to be made redundant rather than which ROLE.

Please avoid orchestrating a redundancy situation to remove a poor-performing or ‘troublesome’ employee. That is not a genuine redundancy, and it exposes you to a potentially costly unfair dismissal or even discrimination claim!

Of course. Skills and qualifications can be combined with other redundancy selection criteria, such as disciplinary records and length of service, when you identify a pool of employees as at risk of redundancy.

When looking at the redundancy selection process, avoid creating selection criteria engineered to select a particular person to go and instead use them to choose who should stay.

The redundancy selection criteria should be objective where at all possible. Avoid criteria such as ‘commitment’, ‘team player’, ‘enthusiastic’, and ‘flexible’- these criteria are not measurable and are often open to accusations of bias.

REMEMBER- You should manage a poor-performing employee via a capability process, and our experts are on hand to advise and offer the best redundancy help to employers.

Yes. You require a redundancy consultation process before making an employee(s) redundant.

Redundancy consultations involve making sure the employee/s knows why you are contemplating redundancies. They are allowed to make suggestions to avoid redundancies, and if selection criteria are used, they must know what and how that criteria will be used. ACAS redundancy consultation meetings are also an opportunity to ensure any alternative employment options are considered.

One of the most significant obligations of employers during a redundancy consultation process is keeping employees updated on what is happening during an ACAS redundancy meeting. However, a 140% increase in redundancy claims to the Employment Tribunal shows employers are getting the employee consultation process wrong.

The Trade Union and Labour Relations (Consolidation) Act 1992 requires employers to keep employees informed and consulted on legal redundancy selection during significant redundancy consultations. A significant redundancy is one in which 20 or more redundancies are proposed at one establishment within 90 days or less. 20 people don’t need to be made redundant to meet this definition; it is just that 20 or more people are proposed.

Unless employee representatives exist in the organisation, employers have to arrange for an election through which several employees are elected to participate in redundancy consultations for the rest. This means the selected employee representatives must attend meetings with the employer to be kept abreast of developments and to convey any ideas, suggestions or opinions from the employee they represent. Where a trade union agreement exists with the employer, the union must be involved in the redundancy consultation process.

The point of the ACAS redundancy process is for employers to agree with employees on important issues, including avoiding redundancies, for example, laying off or short-time working, temporary pay cuts, a cut on overtime hours, etc. Topics discussed should include selection criteria when the proposal is to make redundant some but not all employees.

In addition, certain information must be in writing, including the reasons for the redundancies and the numbers and descriptions of employees affected.

If the obligations in the Act aren’t complied with, the Employment Tribunal can make a ‘protective’ award of up to 90 days’ pay per employee.

Remember, if you need advice on the ACAS redundancy process, contact the experts at Avensure for the best redundancy support for employers available in the UK.

Statutory redundancy pay (i.e., the minimum redundancy pay entitlement required by law) is only payable to those who have worked for you for two years or more.

Redundancy pay is based on age and complete years of service (capped at 20 years’ service):

• Half a week’s redundancy pay* for each full year worked under the age of 22.
• One week’s redundancy pay* for each full year worked to age 22 and over.
• One and half week’s redundancy pay* for each full year worked aged 41 and over.

* The current rate of statutory redundancy pay is capped at £508 per week. Redundancy payments up to £30,000.00 are tax-free.

Your employee who has worked for you for 7 years, is aged 53 and earns £600 per week will get 10.5 weeks redundancy pay = £3,150.00.

Your employee, who has worked for you for 3 years, is aged 24, and earns £450 per week, will get 2.5 weeks’ redundancy pay, £1,125.00.

Many employers fail to consider the statutory notice period when calculating notice, redundancy, and holiday pay. Notice pay will be due to an employee who is made redundant; how much they are owed will depend on their contract or statutory notice entitlement- whichever is greater.

An employee is entitled to one week’s pay for each complete year of service up to 12 years.

Notice pay is not affected by age and is uncapped- it is taxable.

Unsure of your notice obligations? Have your employees’ start dates and contract details ready, and contact our experts for the best possible redundancy advice for employers.

There are no statutory rules for the legal redundancy process in a redundancy exercise involving fewer than 20 proposed redundancies. However, it is still an essential element of the redundancy process and should contain the same topics of discussion and agreement. There are no minimum periods for consultation, but a good process would involve a series of meetings, usually no less than three, over a few weeks.

Consultation is integral to achieving a fair dismissal, so failure to undertake a good consultation can result in an unfair dismissal and a compensatory award at the Employment Tribunal. This will apply even if no redundancy alternative exists, e.g., job loss is inevitable because the organisation is closing down.

The law sets out consultation periods for large-scale redundancies, and specific steps need to be taken when there is trade union recognition. We always recommend seeking legal advice for professional redundancy.

However, the redundancy consultation process needs to be meaningful for redundancies involving fewer than 20 redundancies. As a general guide, we estimate 2-4 redundancy consultation meetings will take around 2/3 weeks.

Remember, the redundancy consultation period is not part of the employee’s notice period. Notice only commences when written notice of the redundancy process is issued at the end of the consultation period.

Advice must be sought before and throughout a redundancy procedure. Our redundancy law experts can advise you at every stage to avoid costly tribunal claims.