Last week it was announced that Boots, the UK’s leading pharmacy led health and beauty retailer is considering closing over 200 stores. The announcement comes not long after it was confirmed that Debenhams, another large UK retailer is closing 22 of its stores immediately and by early next year that total could rise to 50. In light of this news it is understandable that job security will be at the forefront of many employees’ minds. Whilst Debenhams and Boots are household names and therefore attract media interest, rumours about redundancies or financial instability can spread quickly around any workplace. This article intends to focus on both the employer’s legal obligations when considering starting a redundancy process, and also how employers can deal with employees who are worried or anxious about their futures.
What is redundancy?
Broadly speaking, redundancy is used to describe a situation in which an employer decides to reduce the number of its employees, either within the business as a whole, or within a particular site, business unit, function or job role. As employers, you will be responsible to ensure you are following a fair and proper redundancy process. When dismissing an employee by reason of redundancy, the employer must show that there is a genuine redundancy situation and that a fair process is being followed. If an employer fails to adhere to do either of these things it could result in a claim for unfair dismissal.
Redundancy process employers should follow
Employers should inform employees of a potential redundancy situation at the earliest opportunity. This prevents the spread of rumours and whilst it may not be good news for the employees, it is always best to be transparent and honest with them. Depending on the number of individuals who are at risk, there may be additional obligations to inform and consult with trade unions or appoint representatives. We recommend that any employer commencing a redundancy process should take legal advice at the outset to ensure they are fully aware of their obligations.
Employers must make sure that employees are fairly selected for redundancy. It is a legal duty to inform all employees of an impending redundancy, including those who may be absent for reasons such as maternity, paternity and sickness. When considering how to select candidates for redundancy, employers will often use a ‘selection pool’ which helps to demonstrate a fair selection. Generally, it is relatively straightforward for employers to choose a sufficient selection pool, for example by separating individuals according to their department or job role.
Once a selection pool has been established you will then have to consider which employees are to be selected for redundancy. You must not discriminate against anyone when considering who will be selected. As an employer you want to make sure you are retaining the best employees who will have a positive impact on the organisation, however it is important that you do not pre-select individuals and consider everyone fairly.
Dealing with employee concerns
It is only natural that employees will ask questions if they hear reports that their workplace could be closing or that redundancies are being considered. It is often difficult to reassure staff, particularly when those who are being asked questions may either not know the answers themselves, or indeed could be at risk too.
The best way to try and allay concerns is to be as honest as you can be. It is important that you do not mislead employees, even if it may seem like the “easier” option. An employer who appears to be secretive will create a lack of trust and wider issues across the workforce as a result. This could lower moral, decrease productivity and be very damaging in the long term. Try to reassure employees that “they will know as soon as you do”, and that as an employer you will do your best to retain as many jobs as possible and consider alternatives to redundancies. Employees should feel confident that if they are to be subjected to a redundancy process they will be treated fairly.