It’s a worrying time for both employers and employees.

Business costs and household bills are seeing businesses and their workforce tightening their belts and preparing for some tough financial times ahead. Recently the furniture company Made.com called in administrators, a move which is expected to result in 500 job losses, despite the company’s assets being purchased. But it’s not just big firms that are bracing for the worst. As financial pressures continue to build, and more businesses are looking at the tough decisions they may be required to make to navigate the uncertain economic climate.

Recent research has seen a 184% increase from June to July 2022 in the number of inbound queries from employers looking for advice around redundancies.

One area that businesses must look at before making any decisions is how much staff redundancy will cost. There are many factors to consider when costing this, such as an individual employee’s length of service, age, and salary, and this can lead to confusion amongst business owners.

If you are in a business where you require to reduce your staffing numbers, there are measures that are legally required to take place to ensure the process is fair.

When you have selected the positions that need to be reduced, you are required to inform those potentially affected. You are required to consult with affected employees throughout the redundancy process and take on board any suggestions they may have for how to avoid their roles being made redundant.

Once all of the necessary parties have been informed, you will then be required to decide the criteria by which employees will be measured to see if they will be kept on or made redundant. The criteria set out by employers have to be fair and avoid any potential discrimination towards people with the on the grounds of race, sex, disability, pregnancy and maternity. The criteria must be fair, objective and measurable to prevent any discrimination.

You are required to make reasonable efforts to obtain other employment within the business, which might include making them aware of other vacancies that they have the qualifications to fulfil.

Failing to follow one of the required steps, risks an employment tribunal claim. Redundancy can be one of the most distressing events an employee can experience and requires sensitive handling by the employer to ensure fair treatment of redundant employees.

121 HR Solutions can provide advice and guidance to employers contemplating redundancies and can be contacted at enquiries@121hrsolutions.co.uk

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