How to make redundancies
Even though it is one of the least pleasant side effects of a
downturn, sometimes businesses are forced to lay off staff in order
to survive. If you're unfamiliar with the process, redundancy can
be a legal minefield, so you need to make sure you stay on the
right side of the law. This guide will provide you with an
introduction to making redundancies during a downturn.
- Selecting employees to make redundant
- Conditions of redundancy
- Redundancy programmes
Selecting employees to make redundant
One of the first ways of deciding on the pool of employees you
will put forward for redundancy is to look at their skills - do you
have too many people with a certain qualification? It's important
to create a balanced workforce. Next, use appraisals to look at
their performance - but remember, you will need to provide
objective supporting evidence if you choose this method.
- Create a pool of employees who could be candidates for
redundancy
- Look at skills to create a balanced workforce
- Use appraisals to measure performance
Conditions of redundancy
According to the law, you can't just cut back on employees -
they need to be given a valid reason as to why you are making
cutback. This could be because their place of work closes, or
because their position becomes nullified by, for example,
technology.
- Employees need to be given a valid reason for redundancy
- You may choose to close their place of work
- They position may no longer be viable
Redundancy payouts
In many cases, employees who have been made redundant have the
right to receive a statutory redundancy payment (SRP). To receive
an SRP, the worker must have been at the company for at least two
years. The SRP is then calculated by looking at the employee's age,
the amount of time they have worked for you, and their weekly pay.
The maximum SRP is £9,900.
- Some employees have a right to receive SRP
- The worker must have been at the company for two years
- Calculate the SRP by looking at the employee's age, weekly pay,
and the amount of time they have worked for you
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