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Employment Update for Small Businesses
November 2022

Dear Subscriber

As the cost of living crisis starts to bite, some businesses are finding it hard to make ends meet, and unfortunately we are seeing an increase in enquiries about measures to reduce staff costs, including redundancy procedures. So this month we have decided to tackle this topic head on, as well as touching on some alternatives to redundancy that you may be able to consider.
Please contact me if you would like to find out a bit more about any of the subjects raised in this update or if you need any help or advice.

Please forward this email to any of your contacts who might find it of benefit.

Regards
Peter Etherington
Tel: 01664 668164

www.etherington.co.uk

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Peter Etherington
Redundancy Procedure
How to manage redundancies in the workplace
The redundancy procedure is actually not too complex, but it does require some careful planning, and you should start that well ahead of any notices being served. It is a case of working backwards from the target date to ensure you have built in enough time to carry out a fair process. As a rule of thumb you should plan for a minimum of 2 weeks’ consultation* before notices are served.

Before starting consultation you will need to have put  together a business case for the redundancies, identified the relevant pools of employees from which selection for redundancy will be made, and considered what selection criteria to use – that all takes time. So it is best to plan early, even if your plans change along the way.

Don’t forget that a redundancy is a type of dismissal in law, so anyone who is made redundant has the right to claim unfair dismissal (if they have at least two years’ service). That is why it is important to have a clear business case; a fair process, including objective selection criteria, and enough time for meaningful consultation.

We will be able to support you with all of this, so please contact us if you are considering making redundancies.

A good starting point would be to read our guide and Q&As on redundancy which you will find here.

(* If you are planning to make 20 or people redundant you need to comply with collective consultation requirements which are more complex, with a consultation period of at least 30 days)

Alternatives to Redundancy
Can you cut costs without losing staff?
There are a number of alternatives to consider before launching a redundancy programme. First you should check your contracts of employment to see if they include the contractual right for you to place staff on short-time working or temporary lay-off. If so, that can help you bridge a temporary reduction in work or income without losing staff.

However, as with any contractual measure you need to make sure you apply it reasonably. Generally that means giving as much notice as you can and making sure you “share the pain”. So you may decide to put all staff on a 4-day week rather than just selecting some to go on a 3-day week. The same applies to temporary lay-off. If you only lay-off some staff and not others, you need to be able to justify that objectively – i.e. based on the nature of the jobs they undertake or the level of skill (where that is clearly defined).

You may also find it helpful to consult with staff at an early stage if the business is struggling to see if anyone is considering retiring or if they would like to move onto part-time working. If staff know that you are looking for these sorts of solutions, they are more likely to come forward.

Another option is to consider restructuring. Now may be a good time to look at your business with fresh eyes and consider if the structure really supports your aims. It may be that by reorganising roles and tasks, that you may be able to make the business more efficient and thereby cut costs and/or increase revenue. It may still require some redundancies, but you may find the cuts do not need to be as deep as you first thought,

Please contact us if you would like to discuss any of these measures further.

National Minimum and Living Wage
The current National Living Wage and National Minimum Wage rates are:

  • £9.50 per hour for workers aged 23 and over
  • £9.18 per hour for workers aged 21 to 22
  • £6.83 per hour for workers aged 18 to 20
  • £4.81 per hour for workers aged 16 and 17
  • £4.81 per hour for apprentices under 19 and those over 19 in their first year*

*N.B. Apprentices over 19 and who have completed at least one year are entitled to the appropriate rate for their age.

www.etherington.co.uk