Crash course in ... Handling redundancies

Your CEO has just told the top team that 2006 is going to be a year of downsizing. Some operations will be moved, others shut down.

by Alexander Garrett
Last Updated: 09 Oct 2013

Either way, the payroll is going to have to shrink. Time to find out how to organise a redundancy programme.

Plan ahead. 'You should be continuously thinking about what your people requirements will be,' says Rebecca Clake, of the Chartered Institute for Personnel and Development. 'You may be able to avoid making redundancies by natural wastage, re-training people or through imposing a recruitment freeze.'

It's not about slackers. When you announce redundancies, make it clear that it's not personal. 'Redundancy occurs when there is a cessation of business or a reduction of work; you have to assure people that it's not a reflection on them as an individual, but rather on their position,' explains Clake.

Let the people speak. If more than 20 are being made redundant in a 90-day period, you must consult the trade union or an employees' representative.

'Remember it's a consultation, not a negotiation,' says James Davies of employment lawyers Lewis Silkin. 'But you must be able to show that you have considered what they said in good faith.'

Be selective. Draw up selection criteria that reflect the attributes, skills and experience you will need in your organisation. Score all those in the frame against these criteria and, hey presto, the choice is made.

'The important thing is that it can be seen objectively to be fair,' says Davies.

Discriminate at your peril. Your selection process must ensure that someone is not more likely to be chosen for redundancy because of their gender, race, disabilities, sexual orientation or - from October 2006 - age. 'Discrimination is a far more serious issue than unfair dismissal,' says Davies.

Do you really want volunteers? Offering voluntary redundancy is a nice idea, but you could end up losing the people you want to keep. And will they be disaffected if they apply and are turned down?

Manage the bad news. Make sure you tell people individually, face-to-face, and plan to ensure that all those concerned will be available at the right time. Text message and e-mail must be avoided at all costs.

Do the right thing. Be generous; don't just give the legal minimum pay-off, but offer those you're dispensing with support, and help them to find new work. 'You can ask people to waive their rights in return for more generous redundancy terms,' says Davies. 'The other reason is to be seen as reasonable and fair by those who stay.'

Cuddle the survivors. Make sure they understand what your strategy for the future is. 'They may be feeling insecure, so tell them they're doing well,' says Clake.

Do say: 'As part of our restructuring, a number of positions will unfortunately be lost. Those no longer needed will be offered the maximum support.'

Don't say: 'UR P45 IS W8NG. LOL'.

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