My building company has been going for 10 years and has been a good business, but we’ve had a tough year. I have, so far, avoided losing any permanent staff, as I typically use a lot of contractors and short-term labourers. However, I am getting to the point now where I might have to start letting go of long-term employees. I would like some advice on making people redundant and moving permanent staff into short-term and flexible contracts.
A. James Knight writes:
Once you have decided which positions are to go, you need to consider whether those people affected could fill any other roles by including them in a ‘pool for selection’. Once this is drawn up, you need to establish objective criteria and carry out an assessment of each member of the pool to create a ‘provisional’ selection for redundancy. Those provisionally selected should be given a letter inviting them to attend an individual consultation meeting at which their comments and suggestions about the situation can be provided. The letter should set out why redundancies are being made and why they have been selected, as well as informing them of their right to be accompanied.
A letter can then be sent out confirming your final decision, which sets out a right of appeal. If comments or suggestions were made at the meeting, but are not going to be implemented, the letter needs to explain why.
At all stages of the process, the employer is required to consider whether there is any alternative employment that could be offered instead of redundancy. The obligation to keep searching for such vacancies continues until the termination of the employment contract (the end of the notice period). The employee is entitled to try an alternative role on a one-month trial basis, without sacrificing their entitlement to statutory redundancy pay. If in this case there are short-term or flexible contracts available as alternatives to dismissal, then these would need to be offered to any redundant employees as alternative employment.
A change from permanent full-time employment to some other arrangement amounts to termination of the full-time contract or dismissal, and you must, therefore, take care to avoid it being seen as unfair.
James Knight is the founder and managing director of Keystone Law, a full service law firm that advises small and medium sized companies across the UK.
www.keystonelaw.co.uk