With large scale redundancies likely to continue into the near future, it is time to address the gritty question of who gets made redundant and who stays, and how these decisions are made.
The Government has directed public sector agencies to cut costs by 6.5 – 7%, and private businesses are also having to reduce expenses to stay afloat. We are therefore seeing more straight reductions in staff numbers as opposed to positions just being changed or reorganised. This leads to less opportunity for affected employees to be redeployed to other roles, and in turn, greater competition for any positions that are available.
Given the focus on cutting numbers, another trend that is emerging is employers calling for volunteers for redundancy. This is where an employer invites employees to effectively apply to be made redundant, usually in advance of or at the same time as a restructuring proposal is tabled. It sounds odd that any employee would volunteer to have their employment terminated, but where they have a generous entitlement to redundancy compensation, this may be an attractive option.
From an employer’s perspective, and subject to any contractual requirements, they are under no obligation to invite or accept volunteers for redundancy. In this regard, even if the necessary staff reductions could potentially be achieved through volunteers, an employer remains entitled to make business decisions regarding which employees it needs and which it does not.
It is therefore important, when seeking volunteers for redundancy, that an employer makes clear that it retains the discretion as to whether to accept applications in any case. If it does not do so, and commits to accepting all applications, it may lose valuable parts of its workforce or employees with particular skills and knowledge that it wishes to retain.
For this reason, also, an employer is entitled to restrict which parts of the business it extends the invitation to, and to make decisions about which employees to allow to opt for redundancy, on a case by case basis. That said, the criteria for making these decisions needs to be transparent, and fair and reasonable.
If an employer cannot achieve the required reductions through volunteers, or chooses not to make this opportunity available, it must present a business case identifying which groups or positions it proposes to disestablish, and any roles that it intends to create. In cases where the number of employees performing the same role is to be reduced, the employer must set out the criteria for selecting which employees will be retained and the process it will follow in making these assessments.
Any selection process must be fair and reasonable, including that the criteria should be justifiable and relevant to the role. This does not mean that only technical or objective factors can be taken into account because in reality most positions require the role holder to also demonstrate interpersonal skills, such as communication and team work. However where these “soft” skills are being assessed it is important that an employer can back its decisions up with examples of the behaviours. Criteria such as “attitude” and “positivity” are generally too subjective and difficult to evidence, so are best steered away from.
Given that selection decisions are often challenged in a restructuring context, employers should also keep a clear paper trail of the basis upon which they have made their decisions and how they have assessed the potential applicants. It is often helpful to create a “scoring matrix” to ensure that proper consideration has been given to all of the relevant criteria and that the strengths of each employee have been evaluated against these.
Another tricky area is redeployment. The starting principle is that employees whose roles have been disestablished get first dibs on any new positions. This applies even if they are not necessarily the best person for the role and the employer would prefer to offer it to someone else.
The general rule is that if an affected employee could perform a new role, or with some training and support could meet the requirements of the position within a reasonable period, the employer is required to offer it to them. If there is more than one affected employee, the employer can run a selection process to determine who is most suited to the position, but again should give preference to the group of affected staff members, before seeking other internal or external applicants.
In any redundancy situation, decisions that are transparent and based on fair and reasonable criteria, are less likely to be challenged. They also reduce the distress experienced by employees who may otherwise struggle to understand the rationale for decision making or feel targeted.
Making employees redundant is not what most employers want to do. What they can do, however, is run a robust process so that at least employees who are affected feel like they have had a fair go.
This article was originally published in The Post
