HR firm highlights potential pitfalls in redundancy criteria

Phrases like ìlast in first outî could be landing employers in hot water as they attempt to ride out the recession by making redundancies.

A London Human Resources firm has issued a stark warning to employers about the dangers associated with redundancy selection criteria.

Helen Clarke, Managing Director of Jaluch, said: ìWe live in a litigious society – increasingly employees know their rights. Coming up with a selection criteria for redundancies might seem like a simple thing but youíd be surprised how many companies get it wrongÖ and when they do it can bring heavy financial penalties.

ìWe hear from a great many companies who are considering redundancies and want support drafting letters or help conducting consultation meetings, but fewer are asking for support with their selection criteria. The result is innocent mistakes which could destabilise the business both financially and in terms of staff morale at an already vulnerable time.î

Jaluch, which has offices in Westminster, Reading and Ringwood, recommends firms consult collectively on selection criteria before the process of scoring employees begins.

Managers should be given training and written guidance to ensure they know how to score employees against selection criteria and that criteria should be clear and objective.
Helen added: ìAsking two or three managers to score each employee makes the process much fairer.

ìWithout specific legal advice it is essential that companies steer clear of criteria which could result in age discrimination claims like ëlast in first outí or criteria specifically seeking to remove long-service employees.î

Fixed term and part time workers and those on maternity leave are also protected by law and should not be treated differently to permanent staff.

If a criterion for redundancy is ëperformanceí, Jaluch advises companies to be cautious of using staff appraisals as evidence – they arenít always consistently or objectively carried out and can be an unreliable reflection of performance.

Helen concluded: ìMaking jobs redundant is always difficult, but ensuring the criteria is fair and clear so everyone knows where they stand will minimise upset.î