Redundancies are an unfortunate aspect of running a business. In many cases it is an unavoidable task with many companies having to slash operating costs in the current economic climate to remain competitive.
However, it is also important that small and medium-sized enterprises (SMEs) deal with the process in a professional manner to ensure they don’t leave themselves liable for claims against unfair dismissal.
Here are five top tips for SMEs forced into making redundancies for the long term survival of their business.
Ensure redundancies are genuine business decisions
Making redundancies is a major decision for both parties and consequently businesses must make sure they have sound, genuine business reasons for making staff redundant. It should not be used as an excuse to get rid of under-performing employees as this can be managed in an entirely different manner, avoiding legal action against the business.
Calculate how many redundancies required from the outset
It is important that any business knows how many redundancies it is required to make from the outset. This is because the redundancy procedure differs depending on the number of staff likely to be laid off. These include notice and consultation that must be given in cases of redundancies of more than 20 employees.
Oversee a thorough skills matrix
In the event SMEs are required to reduce staffing levels it is important to assess the skillsets of their employees with a thorough pool selection. SMEs should assess the skills of employees within robust, clearly defined pools or groups to further guard against claims of unfair dismissal.
Communication is the key
As difficult as any redundancy situation may be it is vital to communicate strongly with teams and individuals affected. Managers should be prepared to field awkward questions and discussions with frustrated staff. Losing your job is one of the most stressful situations a person can face so be sure to show understanding and compassion.
Adhere to redundancy payments
Finally, it is also crucial to follow the necessary payment procedures. Adhere to redundancy payments for employees with two or more years of service – the final figure is calculated by combining the age of the employee, their length of service and their standard weekly wage. Be sure to document every payment as all business practices come under increasing scrutiny during a redundancy period.
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