Employer obligations

Notifying the workforce

You should first inform your workforce of your proposal to make redundancies – including staff who you don't intend to be affected by it.

Fair selection and process

Fair selection is of critical importance when determining which employees will be selected for redundancy. The pool needs to be chosen carefully and criteria used should be objective (see below for more).

The process used must also be fair and decisions should be made objectively. If you have procedures for selection, they must be carefully followed, provided they are reasonable.

The pool for selection

You have a reasonable degree of flexibility when deciding which 'pool' or group of employees should be included for proposed redundancies. The pool should be as wide as possible to avoid claims for unfair dismissal on the grounds that an employee who was omitted from the pool, should have been dismissed instead of the chosen employee.

In cases of collective redundancies (Consultation before redundancy), the selection pool should be discussed and agreed with the employees' representatives (usually a trade union) before being applied.

When choosing which employees should be included in the pool, consider:

• Whether other groups of employees in the business perform a similar role - this may include employees at other sites or parts of the business. If so, they should be included in the pool.
• Employees whose roles are interchangeable with the roles performed by the employees in the pool
• If the role or position of the employee is consistent with the roles/work performed by the employees already included in the pool.

The selection criteria

To decide which of the employees who are at risk will be made redundant, they are scored based on the selection criteria.

When creating the selection criteria, subjective factors or personal opinions should not be used. Instead, as far as possible, use objective factors that are relevant to the needs of the business, and which can be verified using available records and information (E.g. performance appraisals and attendance records).

In cases of collective redundancies (Consultation before redundancy), the selection criteria should be discussed and agreed with the employees' representatives (such as a trade union) before being applied.

You should:

• Not include trade union membership as part of the selection criteria, as this can make any resulting dismissal automatically unfair.
• Avoid selecting employees based on 'last in, first out', as this is can be age discrimination. But it may be possible to use this if it's not the only criteria used or if all other selection criteria have been applied and a stalemate situation arises. You should get legal advice before applying it.
• Not use the amount of salary earned by an employee as a factor for the selection criteria, as this can be indirect age discrimination.
• Not use an employee's performance if you don't have any records that can be used to support it, or if the performance has been measured solely using subjective measures.
• Not use criteria that can discriminate against employees (directly or indirectly) on the grounds of their age, disability, gender reassignment, marriage or civil partnership, pregnancy or maternity, race, sex, sexual orientation and/or (in England, Wales and Scotland) religion or belief or (in Northern Ireland) religious belief or political opinion.

You should also be careful if using attendance as part of the selection criteria. Do not include any of the following:

• Time off while on a type of statutory family-related leave (e.g. maternity leave or paternity leave)
• Time off due to the disability of the employee or one of their dependants.
• Time off for any absences due to injuries suffered at work, unless you can show that this has been consistently applied to all employees.

Instead, if any of these apply to an employee, add a note to make it clear that it has been excluded when considering the employee's score.

Employers have to be able to prove that their selection criteria were fair.

Consultation and notifying the government

You must consult with the employees who are at risk of being made redundant.

You may also need to inform the government if you intend to make at least 20 redundancies from one establishment within a period of 90 days or less. Establishment means the location/business unit where the employees carry out their duties and redundancies are being proposed. It does not include other sites across your business where you may be proposing redundancies of less than 20 employees.

See Consultation before redundancy for more information about consultations.

Obligation to explore suitable alternative jobs

There's a legal obligation to thoroughly explore whether there are any suitable alternative jobs that can be offered to employees at risk of redundancy, to avoid dismissing them. These can be either within the business or any associated business, including subsidiaries and parts of the business located on other sites.

Whilst there is no obligation to create a new job, a reasonable employer can be expected to make minor changes or reasonable adjustments to an existing vacancy, if these would make it suitable or acceptable to an employee at risk.

You should also ask if an employee is prepared to be demoted or accept a job at a lower grade/status or pay to remain in employment (don't assume the employee will not accept this). In such cases, the employee should be told that they will not lose the right to redundancy pay if the offer is refused.

Also, you may wish to consider bumping (see Types of redundancy).

Note that certain employees have a right to be offered any suitable alternative jobs (without taking an interview) ahead of other employees who are at risk of redundancy. This applies to:

• Pregnant employees who have informed you about their pregnancy. Their right ends 2 weeks after they gave birth or their pregnancy ends (if they're not entitled to maternity leave).
• Employees who qualify and take maternity leave, adoption leave, shared parental leave and neonatal care leave. Their right starts from the day their leave starts and ends 18 months from the date their child was born/adopted. If they took shared parental leave and/or neonatal care leave, they must have taken 6 consecutive weeks of it to qualify.

An employee who accepts an offer of alternative work is entitled to take the job on a trial basis. They may still be entitled to claim a redundancy payment if, during the first 4 weeks in the new job, they resign on the grounds that it is unsuitable.

If an employee unreasonably refuses an offer of suitable alternative work, they may forfeit their right to a redundancy payment.

Time off

Employees with 2 years' service who are under selection for dismissal because of redundancy are entitled to reasonable time off from work, either to look for new employment or make arrangements for training. They are also entitled to be paid their normal hourly rate for such time off, up to an amount not exceeding 40% of a week's pay.

You should check the employee's contract or the staff handbook in case they are entitled to enhanced payments or time off for other reasons, with or without pay.

Notice

The redundant employee who is dismissed is entitled to their proper notice or pay in lieu of notice (as may be set out in their contract of employment), in addition to any redundancy pay.

If the employee does not have a contract of employment, or if the contract does not state the notice period to be given by the employer, then the following statutory minimum periods of notice which will apply:

• To the employees with under 1 month's continuous service: no notice requirement
• To employees with 1 month or more continuous service: 1 week
• To employees with at least 2 years' continuous service: 2 weeks and 1 additional week for each additional complete year of service, up to a maximum of 12 weeks for 12 years or more of continuous service

Employees are also entitled to be paid for any untaken holiday entitlement.