Employment law: A redundancy situation

A FREQUENT call we receive from practice managers is in regard to advice on how to effectively make an employee redundant as the result of a job no longer existing. This can be for various reasons such as a practice closing down or patients moving to another practice or the requirement to reduce the number of employees, possibly after a merger of two practices.

So what are the legal framework, legislation and processes around carrying this out correctly and how can you minimise any potential future problems or risks to the practice?

Before we get into the detail, let’s take a step back.

POINTS TO CONSIDER

The first question you should ask yourself is do you intend to replace the individual once you have made them redundant? If the answer is ‘yes’ then this may indicate that it’s the person not the position you wish to no longer be part of your practice. Redundancy cannot be used as a means of terminating the employment of a poorly performing staff member – a thorough performance management process should be used instead.

Other areas to think about (although I am certain you will have by this point) – are there any ways to avoid redundancy? Some measures might include limiting any recruitment activity and stopping or reducing overtime, laying off temporary or agency staff, offering voluntary redundancy or offering flexible working such as part-time to staff members in an attempt to reduce the overall wage bill. Also think about natural wastage – not replacing staff planning to leave the practice.

The law dictates that there are two processes to support redundancy: one where you are making more than 20 employees redundant at the same time and one where it is fewer than 20 employees being made redundant.

In the majority of practices it will be the latter, so we can focus on that but just be aware of the difference.

CONSULTATION

Employees should always be consulted prior to any redundancies taking place, including briefings as to why the redundancies are necessary, any alternatives to making people redundant, fair selection criteria and what if any suitable alternative employment is available. Consultation can either be done on an individual or collective basis (although this must be collective if over 20 employees are being affected).

It’s not legal to simply choose the people that you wish to make redundant; there should be a fair process in place using fair selection criteria such as attendance, disciplinary history, skills and experience and performance. Take caution, however, to ensure that any information that can be linked to either an employee’s disability or pregnancy is not taken into account.

NOTICE AND PAYMENTS

Once the relevant people have been selected and consulted, you are required to let them know what notice will be given to them, usually after referring to their contract of employment. In the absence of this, statutory notice periods will apply.

An employee may be eligible for redundancy payments if they have worked with the practice continuously for two years or more, and statutory redundancy payments take into account an employee’s age, length of service and weekly pay.

The above only discusses the process; one must keep in mind what an emotive, difficult and personal experience it can be for the employees and also the managers dealing with the redundancy process. The employment law advisers at MDDUS will be able to give you advice and guide you through any process.

Janice Sibbald is an employment law adviser at MDDUS