Guiding Employers Through the Redundancy Process

Upcoming increases in employer's National Insurance Contributions and the National Minimum Wage from April are adding significant employment costs to organisations across all sectors. In response to these higher costs, employers planning to reduce staff levels in the next three months has risen from 11% last quarter to 16% this quarter. What these increased costs may lead to is the unfortunate possibility of organisations laying off employees and making them redundant. Employer confidence has taken a hit, with 32% of businesses planning to cut jobs through redundancies or reduced recruitment. Where there is a risk of this happening, an employer should tell all employees as soon as possible that they are considering cutting costs, explaining;

• why and how costs are going to be cut
• which roles may be potentially at risk
• what happens next, including how everyone will be consulted

An employer should be open and transparent with employees around potential redundancies. They may try and look at other options before deciding on redundancies, for example changing working hours, offering voluntary redundancy or moving employees into different roles or areas of the business. In the case of 20 or more redundancies, there must be a collective consultation, while in the case of less than 20 redundancies, there must be individual consultations. An employer must tell employees how long the notice period is until they are made redundant, which can be statutory or contractual and keep paying employees until the end of the notice period. Additionally, an employer must pay an employee ‘in lieu’ for any untaken statutory holiday entitlement they have accrued when they leave meaning an employee is entitled to holiday pay from the employer, instead of them taking the holiday. Our specialist HR Advisory team works alongside clients throughout the redundancy process. To discuss your own circumstances, please get in touch with HR Consultant Brian Lenehan E: brianlenehan@bakertillymm.co.uk T: 028 9032 3466.