HR Expert: Redundancy
A client is contemplating redundancies. In order to cut costs, they propose to reduce the work of a particular department, which will mean losing a couple of staff members. They want to avoid animosity developing amongst the team. One way they have identified of doing this is to ask for volunteers to be made redundant. What advice can I give them about voluntary redundancies, and what will they need to watch out for?

Voluntary redundancy is one way you client will be able to identify those in the business who might be wanting to leave anyway. In doing this, they can achieve two things at once: remove a potentially less committed employee from the organisation, and reduce the overall headcount, in line with their goal. Sounds simple enough, but there are some pitfalls your client will need to watch out for.

1. It must be a genuine redundancy situation

This may sound obvious, however a common misconception with voluntary redundancy is that it does not need the same justification as a compulsory redundancy. This is not true. Voluntary redundancy is still a dismissal in law, and there is still a risk of an unfair dismissal claim if things go wrong.

In White v HC-One Oval Ltd [2002], an employee volunteered for redundancy. However, the reason they did this was because they felt they had no other choice, and that the redundancy process the employer had proposed was designed to single them out. The tribunal, unfortunately for the employer, agreed with this and awarded the employee financial compensation for their unfair dismissal.

Your client therefore needs to have sound justification for introducing redundancies to their workforce. It must be because there is a genuine reduction or total loss of particular work, or work at a particular place.

2. A process must still be followed

If there is a genuine redundancy situation, a process is still needed. Your client cannot simply approach certain staff members to discuss voluntary redundancy, it needs to be offered as part of the overall redundancy consultation. This means meeting with all affected employees and outlining the possibility of redundancies. All of the affected employees (i.e. those in the team) will then be placed at risk of redundancy, and invited to bring their ideas and thoughts on the proposal to an individual consultation meeting. At the same time, your client can put forward the idea of voluntary redundancy, and invite those interested to come forward.

3. Be careful not to lose the best staff

Your client may have certain individuals within the team who they would struggle without, due to their skills and expertise. They should make it clear they will not necessarily accept everyone who volunteers; they don’t want to lose someone with valuable skills and attributes not seen elsewhere in the organisation. Whilst this may disappoint those who have volunteered, it does present an opportunity to focus retention efforts on them, as clearly, all is not well in terms of their commitment to the business, and they may be looking to move elsewhere at some point soon anyway.

Any decision to decline a volunteer for redundancy needs to be reasonable, and fair. Your client should therefore be able to provide objective reasons why a particular employee has been told no.


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