The Coronavirus pandemic has put pressure on a lot of businesses, causing many to consider restructuring and redundancy.
We help employers every day to deal with redundancy and restructuring, coming up with a plan that both protects the company and keeps the employees’ wellbeing in mind. This article looks at the key things to consider when planning a company restructure or redundancy procedure.
Restructuring and redundancy stats for 2020
According to new data from the Office for National Statistics, some 695,000 UK workers have disappeared from the payrolls of British companies since March, when the Coronavirus lockdown began.
The pandemic has led to twice as many redundancies being planned compared to the height of the 2008-2009 recession. The Institute for Employment Studies (IES) report that 380,000 redundancies were planned for May to July (compared to 180,000 job losses between January and March 2009). The IES estimate that there will be 450,000 redundancies made this Autumn (but warn that this number could increase to 735,000).
It is very important with redundancies that you get the process right to avoid claims.
Tips for restructuring and redundancy
Dealing with restructuring and redundancy can be daunting for any employer at any time, and sadly we’ve seen many redundancy programmes that have gone awry. We help employers to face the situation and move forward, making changes smoothly and effectively.
Details of the support we can offer with restructuring and redundancy is available here.
Our tips for restructuring and redundancy are outlined here:
#1 – Plan this as a project – before you start any hares running
Start your planning early, then set tight but realistic milestones that work around the diaries of your key players.
#2 – Write up your business reasons for the proposed change
Impacts from the pandemic may be stark, but still write up the effects within your business specifically. Include two structure charts (before and after) and include relevant financial figures like savings. Work out estimates of redundancy payments, whether statutory or enhanced by contract.
#3 – Be clear on the procedure you’re going to follow
Take advice from an employment lawyer at an early stage to make sure you have planned a fair process that can withstand challenge.
#4 – Watch that what you are proposing meets the legal definition of ‘redundancy’
This is sometimes misunderstood and can catch people out.
#5 – How many employees are being made redundant?
Check whether what you are proposing amounts to 20 or more employees being made redundant over a 90 day period, to see if you need to do collective consultation (which includes notifying the Secretary of State).
#6 – Pick someone to lead the process who has good emotional intelligence
A good process can easily go awry with the wrong person delivering difficult news, or reacting badly to comments.
#7 – Will you be asking employees to volunteer for redundancy?
Think early on about whether you are going to invite volunteers for redundancy and if so what (if any) enhancements you will offer.
#8 – Be prepared for questions
Always prepare answers to the questions staff are likely to be worried about – be ready.
#9 – Be fair in your selection
To fairly select staff for redundancy:
- Take care to identify the appropriate ‘pool’ to select from – narrow or ‘pools of one’ may leave you more open to challenge.
- Consult properly with people in the ‘pool’ – present proposals as just that – not a ‘done deal’. That means listening, considering and responding to points raised, and being open to amending proposals.
- Use a matrix of objective measurable criteria to select people, focussed on what you need for the future of the organisation, by way of skills.
- Give proper thought to possible alternative roles for those affected.
In summary, plan the project, take advice, follow process and act with integrity to those affected. For more information on how to deal with redundancy in an ethical manner, please read here.
For more tips on how to navigate redundancy, you can also watch our YouTube video here.