How to... make redundancies
Once you’ve exhausted all other possibilities, job cuts may still be inevitable. Andy Allen has the lowdown on making the process as painless as possible
Date:
07 May 2009
Source:
Guide to Surviving the Downturn
Page:
10
No matter how imaginative an employer’s efforts to avoid redundancies may be, there will still be times when job cuts are unavoidable. In such situations HR professionals may be tempted to rush through redundancies in the belief that a short, sharp shock will cause less disruption than a prolonged shedding of jobs. But this is flawed thinking.
As the CIPD’s employee relations adviser, Mike Emmott, said in a recent podcast for the institute: “There are a lot of complexities around redundancy. Any employer that wants to avert a legal challenge and avoid leaving everybody feeling disenchanted ought to get its head around what the law requires.”
So what steps are required to ensure a smooth transition?
1 Warn everyone that job cuts are being considered
The first step in any possible redundancy process should start well before any redundancies are made, according to Margaret Davis, a partner at City law firm Field Fisher Waterhouse,
The employer should give notice that cutbacks are being considered. Individuals who could be made redundant should be notified of the possibility before any decision has been finalised.
Davis stresses that it’s important for the employer to remember that it is the position, not the person, that’s being made redundant. “Very often you see employers using this as a chance to get rid of someone who has been a thorn in someone’s side for a long time,” she says. “Perhaps they want to avoid the painful conversations that might be necessary in a standard dismissal.”
Giving in to this urge can be a costly mistake. “Clients can be surprised when I tell them that this is not a redundancy situation and that if this is challenged it will never stand up,” Davis says.
Employment tribunals look harshly on such practices. Bear in mind that employees are far more aware than they used to be of the procedure that employers must follow – and the likely legal redress if they fail to do so. The biggest danger, according to Davis, is in presenting redundancy as a fait accompli. This can lead to unnecessary bitterness and a costly legal challenge.
Cary Cooper, professor of organisational psychology and health at Lancaster University Management School, urges employers to be as honest and open as possible. Keep the workforce informed, even if an employer is uncertain about whether they will make redundancies, he recommends. Keeping your cards close to your chest for fear of unsettling employees is the wrong approach.
“The minute you lie and say that there’s nothing to worry about and then proceed to let 5 per cent of your workforce go, you’re in deep trouble. I think people are very insecure about their jobs anyway. Get them to be partners. Try to build a Dunkirk spirit,” Cooper advises.
2 Hold a formal selection process
Employers should protect themselves from any legal challenge by holding a formal process to choose who should be made redundant using objective criteria such as performance, absence rates and qualifications. Take care that the criteria are not discriminatory. To make a disabled employee redundant on, say, the basis of absence, could be seen as discriminatory – perhaps this individual has needed frequent medical appointments because of their disability. For similar reasons, the traditional practice of “last in, first out” has fallen from favour. The most recent recruits in an organisation tend to be the youngest, so making them redundant could lead to claims of age discrimination.
“There’s only one way to do it, and that’s eyeball to eyeball,” says Cooper of communicating the decision itself. “No texting, no emails, no large meetings.”
3 Offer redundant staff other vacancies
Once the selection process is complete, it is good practice to offer redundant employees any vacancies that may have been created in other parts of the organisation. Even if these offer lower pay and status, employees may be happy to accept them.
4 Inform the government about major cutbacks
Perhaps the most obvious legal danger comes when an organisation is making large-scale job cuts. As Emmott points out, there is a requirement to notify the Department for Business, Enterprise and Regulatory Reform if more than 20 people are made redundant, giving at least 30 days’ notice. Progressively more notice is required if more jobs are cut.
5 Help employees to find alternative work
Cooper believes it is important that the employer recognises the sense of rejection that individuals feel when they lose their jobs. It should try to offer help finding alternative work. The very least it should do is provide a glowing reference.
Once notice of redundancy has been given, an employer is obliged by law to allow employees who have been with the organisation for two years or more time off during their notice period to seek other work or training opportunities. (There are exceptions for some employees, such as police or military personnel.)
In the event of redundancies, Jobcentre Plus’s rapid response service can offer people advice on searching for new jobs, alternative sources of employment and an evaluation of their skills. What’s more, individuals who are newly redundant or under notice of redundancy can also access training support for two to eight weeks in order to improve their skills and employability through Jobcentre Plus.
Get the right assistance for your employees at Jobcentre Plus.
6 Don’t forget the survivors
There is a growing awareness among HR professionals that the effect of redundancies on an organisation last far beyond the event. As Cooper explains, a “self-protective culture” often emerges among the remaining employees because they fear further job cuts.
“They become less co-operative with colleagues whom they perceive as their competitors for jobs that will continue in the long run,” he says. “Very typically, they will engage in presenteeism. In the long run this is a very destructive tendency, as it causes burn-out.”
To ensure that these do not have a long-term corrosive effect on performance, HR must take care to discourage presenteeism and look for where teamwork is suffering.
Introducing the CIPD’s transition service
Organisations that recover more quickly and effectively from a period of transition are likely to be the success stories of the future, according to the CIPD, which is offering consultancy services and resources to help employers during restructuring and redundancy programmes.
A range of services, including strategic and operational expertise, guidance and hands-on support, can be tailored to meet individual organisations’ needs.
Taking all or part of a business through a radical change requires effective planning and thorough and consistent implementation. The level to which the CIPD’s transition service engages with an organisation is flexible, depending on its specific requirements. It ranges from low (a single advice session), through medium (targeted interventions) to high (a full service partnership from project inception to implementation and beyond).
To discuss your organisation’s needs, call the CIPD’s transition team on 020 8612 6584, or visit CIPD transition for further information.
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