This is never a good subject to talk about and most people who have done this in the past find it a very stressful experience. However, the reality is that at some point you may need to make staff redundant. There are many rules and regulations you need to follow and this guide will introduce you to them.

Background

In an ideal world business would continue to grow and generate enough money to keep all staff fully employed and paid. However there are many situations where changes in business lead to the requirement of making some or all staff redundant. For example: the business stops trading, the business needs to move location, the business changes direction and requires skills the existing staff members no longer have. Whatever the reason you need to keep employees well informed and carry out a fair redundancy procedure. Remember that making some of your staff redundant is better than hiding from the situation and jeopardising all jobs in the business - including yours.

Compulsory or non-compulsory

If you simply need to cut down staff numbers or costs then you could allow non-compulsory redundancies. This is when you would ask your workforce for volunteers. You may also offer the option of early retirement. Using this option you should add that it is at the discretion of the management who can actually leave, as you do not want to lose your best members of staff. This might also prove to be a more expensive option as long serving employees may volunteer and they are more expensive to make redundant.

To make compulsory redundancies you need to choose a group of employees that redundancies will be chosen from. This should be as wide as possible but if there is only one person then that is also fine. You need to establish criteria for making the choice and inform the staff of what this is. There are certain criteria, which are considered unfair, and you need to ensure that you do not use these. Look on the Department for Business Enterprise and Regulatory Reform (BERR formerly DTI) website (link below) for details.

Redundancy procedures

If you plan to make more than 20 employees redundant within a 90-day period you need to inform BERR and consult with workplace representatives. This consultation must be 30 days before you make between 20 and 99 people redundant and 90 days before 100 or more.