As Homebase becomes the latest high street retailer to announce store closures and job losses, Jo Stubbs, head of product content strategy at XpertHR highlights the five most common mistakes employers make when handling redundancies and gives her guidance on what companies should be doing in this situation.
Retail and restaurant closures continue to sweep across UK high streets, with Homebase, House of Fraser, Toys R Us, Prezzo and Byron Burgers among the latest well-known brands to suffer.
With more and more businesses facing closures, what five mistakes do employers commonly make when handling redundancies?
Starting collective redundancy consultation too late
All too often, employers start collective consultation far too late in the day, typically because those at the top retain hope that business will improve or do not see informing staff that the business is in trouble as a priority.
Employers’ collective redundancy consultation obligations are triggered once they are proposing to make 20 or more redundancies at one “establishment”, which might be a single store or restaurant, within a period of 90 days or less.
Consultation must begin “in good time” and in any event at least:
- 45 days before the first dismissal is to take effect, if 100 or more employees are affected at the same establishment; or
- 30 days before the first dismissal is to take effect, if 20 to 99 employees are affected at the same establishment.
The collective consultation should be completed before the employer provides employees with notices of termination of employment.
Not conducting a meaningful redundancy consultation
Employers frequently see the process of consulting with staff over redundancies as a box-ticking exercise and fail to understand that there should be a genuine dialogue about the proposals.
Union representatives must be consulted about ways of avoiding redundancies, reducing the number of redundancies, and mitigating the consequences of redundancy.
Overall, employers must approach the consultation with an open mind and be prepared to consider employees’ views. If ways of avoiding or reducing the number of redundancies are put forward, these should be properly considered and not dismissed out of hand.
Not informing and consulting on an individual basis
Individual consultation with employees remains essential, even where the employer’s obligation to consult collectively has been triggered.
Individual consultation involves the employer explaining to each employee the basis on which he or she has been provisionally selected for redundancy, and giving the employee the opportunity express his or her views, raise any questions, and discuss any alternatives to redundancy.
As with the collective consultation process, a meaningful individual consultation process must be concluded before an employee is provided with notice of termination of employment.
An employer that serves notice prior to completing an individual consultation puts itself at risk of an unfair dismissal finding in any subsequent employment tribunal claim, on the grounds that the process was a sham and the redundancy predetermined.
Not looking out for alternative employment for redundant employees
One of the most significant things that an employer can do to minimise the inevitable unfairness for a redundant employee is to determine if there are any vacancies that would be suitable for him or her.
For a large retailer that is closing stores to cut costs, this could include moving the employee to another nearby store, if there are vacancies at that location.
Employers should be open minded about alternative positions and not assume that employees would not be willing to relocate, if the only alternative is redundancy. The safest course of action is to provide employees with details of all vacant positions.
While employers are not obliged to create new jobs for redundant employees, making an employee redundant without considering alternative employment increases the risk of a tribunal subsequently making a finding of unfair dismissal.
Forgetting employees who are left behind following redundancies
Employers should never underestimate the impact that redundancies have on staff who remain behind. A failure to support redundancy survivors, who often face a change in their job, an increase in work and changes to the organisational structure, can be fatal to the success of a reorganisation.
It is vital that employees affected by redundancies are involved in the redundancy consultation exercise, even if those individuals are not themselves at risk of losing their jobs. The earlier redundancy survivors are involved in discussions about a reorganisation, the more likely it is that it will be a success once the dust settles.
Once the redundancies have been made, survivors should be provided with support, including guidance and training, to help them to cope with any changes to their role.
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