Carey Olsen employment specialists outline appropriate redundancy process

Posted: 11/07/2013

Carey Olsen Elaine Gray Huw ThomasCarey Olsen's employment team has urged local employers to have a clear plan in place when considering redundancy measures.

Employment law specialists, Advocate Elaine Gray, from Carey Olsen's Guernsey office, and Huw Thomas, from the firm's Jersey office, presented delegates with a step-by-step guide to handling a redundancy process at a breakfast briefing on 4 July.

Mr Thomas said: “The issue of redundancy is particularly topical at present and it is an area which presents significant risk for employers. The old theory of making people redundant on the basis of ‘last one in, first one out' is well-known but not necessarily the best way to proceed in a modern workplace. It is also critical that employers plan any redundancy process so that management is able to justify the business case for change to employees and, if necessary, a tribunal.”

Employers need to gain a proper understanding of the current state of the company's workforce to be able to identify the business case for change and from that to establish if redundancy is the appropriate step. The business case for change should identify the main drivers, the costs and benefits as well as the commercial, human resources and legal risks.

“Having undertaken these steps, employers will then be able to compare the current structure of the business with the new proposed structure to identify what changes to staffing levels may be necessary,” said Mr Thomas.

Advocate Gray outlined several steps which employers could take to minimise the need for compulsory redundancies, including freezing recruitment, reviewing overtime, and considering reduced or amended hours, as well as looking at the number of agency and temporary staff employed by the organisation.

“Although redundancy is a potentially fair reason for dismissal, it is essential that employers who embark on a redundancy exercise ensure that they have a good process in place to consult with employees who are affected by the situation. Failure to conduct a fair process could result in a former employee bringing a claim before the employment tribunal. Employers should consult Guernsey's Employment Protection law and the Commerce and Employment Department's Code of Practice on Handling Recruitment which the local employment tribunal looks to as a guide to best practice.

“When considering employees for redundancy the selection criteria used must be fair and objective and there should be clear rules about what will and will not be taken into account. Involving more than one person in the selection process helps to reduce the risk of perceived bias and discrimination and offering an appeal process is a useful safety mechanism to enable any issues in the initial process to be addressed,” said Advocate Gray.

Pictured (left to right): Carey Olsen employment specialists, Advocate Elaine Gray and Huw Thomas.

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