Despite the slow economic recovery experienced by business during 2003, new statistics from Croner Consulting show that managing redundancy tops this yearís list of HR concerns for employers.
Croner Consulting, the UKís largest provider of in-depth advice and practical support for business, received over 100,000 calls to its employment advice lines on over sixty-five subjects through 2003. More than one in ten calls were related to redundancy issues. This was closely followed by employment terms and conditions; absence and sickness; disciplinary procedures; pregnancy; and holiday and holiday pay.
Redundancy callersí queries ranged from fair processes of dismissal in a redundancy situation, to assistance in calculating redundancy payments.
Employers must follow a fair process when it comes to making redundancies. Dismissals must comply with the definition for redundancy; failure to do so would make the dismissal unfair.
A legal framework is in place to protect employees from unfair dismissal. However, with around 44,000 applications for unfair dismissal registered by employment tribunals every year, many employers are obviously still not complying.
The average compensation award is 5,917, but in some cases has been over 60,000. This can be avoided if businesses ensure they comply with the Employment Rights Act 1996, which provides guidelines on a fair redundancy procedure.
Cathie Riley, employment law expert at Croner Consulting says: Redundancy has topped the number of calls to our helplines for the second year running. Unfair dismissal is by far the most common type of claim to employment tribunals, so itís not surprising that businesses are seeking advice.
Unfortunately, some employers think that redundancy is a safe route for dismissing employees with whom they have problems. This is not the case, as redundancy is a dismissal on specific grounds and relates to the job and not the employee.
Croner Consulting advises employers according to Section 139 of the Employment Rights Act 1996. Redundancy is only fair if the employer has ceased, or intends to cease, to carry on the business, or carry on the business in the place where the employee was employed; or if the employeeís
work has, or is expected to cease or diminish.
Cathie continues: If an employeeís workload ceases or greatly diminishes, the employer, as part of consultation, should consider alternative vacancies with the employee. If a number of jobs become redundant, employees at risk should be fairly selected for redundancy.
Consultation must then be held with the employees, after which a notice period should be given. Failure to consult in redundancies involving twenty or more proposed dismissals can result in each employee claiming a ninety-day protective award. Furthermore, those employees with more than one yearís service could claim unfair dismissal.
When proposing to dismiss twenty to ninety-nine employees within a ninety-day period, the employer must consult with the employees for at least thirty days. A hundred redundancies or more require a minimum consultation period of ninety days. The employee may also be entitled to statutory redundancy pay if they have more than two years service; this is based on the length of service and the age of an employee at the time of dismissal. The current maximum weekly pay figure is 260.
Cathie says: Redundancy is a sensitive matter that can cause unrest and insecurity among remaining employees. Employers should be as open and honest as they can, and perhaps consider some employee relations exercises to boost morale. Croner Consulting recommends that employers unsure of how to handle the redundancy process fairly, or who are concerned about the disruption redundancies may cause, to seek further advice from experienced professionals.
Management redundancy is biggest worry for business in 2003
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