Unexpected Employee Reactions

The Redundancy Process

Humans can be funny, unpredictable critters. Our minds play tricks on us, we can fail to see what is right in front of us and we create alternative perspectives to satisfy our ego’s need to be right or feel in control or safe.

There is a plethora of psychological reasons why the same communication to a team of employees can be heard and understood differently. This is frequently the case when an employer begins pre-emptive discussions with employees about business being ‘down’ and ‘things getting a little quiet.’

We are often told by clients that they are surprised that their employees are surprised when the possibility of redundancies is formally proposed. The employer will describe frequent team meetings when the slowness of work is discussed and that they have spelt out that if things don’t change then cost savings will need to be made.

From an employee’s perspective these communications can seem vague, have little to do with them or they just don’t understand how the realities may directly impact their job.

If business is tough going at the moment, and it is for many organisations, we recommend you communicate this clearly and as openly as possible to your employees. Then, make decisions about cost savings in a timely manner. Avoiding the inevitable because the decision is a difficult one to make, is likely to make the cost cutting requirements even greater.

If redundancies are likely, irrespective of how certain you are of the decision, there is a process that must be followed. Even if you are deciding to close the business, these steps must be adhered to. They are:

1. Present (in writing) your restructuring proposal to your potentially affected employees. If a possible outcome is redundancy this needs to be clearly stated.
2. All information the employer is considering in order to reach their decision, must be provided to the employee. This includes financial information.
3. The potentially affected employees are consulted on the proposal. They are entitled to the opportunity to give feedback on the proposal. They are also entitled to have a representative or support person with them at any meeting about the restructuring and adequate time to consider the proposal.
4. If there is more than one person holding the same position, but only one position is (proposed) to be disestablished, then the employer must also consult on the criteria to be used to select which employee is to be made redundant.
5. When the employer has listened to all the feedback, they are required to consider it before making a decision about the proposed disestablishment of positions and selection criteria (if applicable).
6. The employer then makes a decision on whether to implement the restructuring.
7. The employer applies the selection criteria, and if this is evaluative (instead of ‘last on, first off’ for example), it is necessary to consult with the employee again on how the criteria have been applied.
8. Prior to deciding on redundancies, the employer is obliged to consider alternatives such as redeployment to any vacancies.
9. Ultimately, written notice of the redundancy is given.

The process can be complex and it is frequently challenged by employees. Even when a redundancy is for genuine reasons, if the process is not correctly followed and employee will likely be successful if they raise a personal grievance. Please call one of our Consultants if redundancies are something you are thinking about.