Redundancy will always be a last option for any business. Nobody wants to build a team of employees to break it up again. Unfortunately, sometimes it is the only option.
As a small business owner, you must make all the decisions. It’s up to you to decide which roles will be made redundant. In any size team this will feel personal and be taken personally by both those affected and the other team members.
The law sets gives some help about the redundancy process. Unfortunately, nobody is going to tell you who to make redundant.
So, as a business owner, how do you make that decision?
1 Your heart can’t rule your head
Making a difficult decision about redundancy is never easy. In a small business your employees become more than someone who works for you. You know that
- Charlie is saving to get married
- Abdul is looking forward to welcoming his first grandchild
- You have more in common with Ashanti than Rachel because you both love Yoga.
As Michelle Obama said ““Success isn’t about how much money you make; it’s about the difference you make in people’s lives.”
When you have to decide who to make redundant you must ignore any personal feelings. You must
- Be Objective
- Be Fair
- Not discriminate against any individual or groups.
2 Avoid discrimination
When you are thinking who to make redundant you must make sure that you don’t discriminate against any employee.
The Equality Act 2010 says you can’t discriminate because of a ‘protected characteristic’. This includes
- disability (that would include people who are, for example, shielding)
- gender reassignment
- marriage or civil partnership status
- pregnancy or maternity leave
- religion or belief
- sexual orientation
You can find those here https://www.equalityhumanrights.com/en/equality-act/protected-characteristics
You can’t discriminate against an employee because of any of the following:
- part-time or are on a fixed-term contract
- pay or working hours. This could include, for example, because of flexible working
- being a member or employee of a trade union or are a trade union representative
- family related leave (e.g. parental or adoption leave)
3 A Fair Way
The law says that redundancy must be fair. Unfortunately, the law doesn’t tell us exactly how to make it fair.
So how can your redundancy process be fair?
(1) ‘Fair reasons’ – a selection criteria
You need to decide on some fair reasons for choosing which roles to make redundant. The law calls this a ‘fair selection criteria’. The following reasons will usually be ‘fair’: –
- skills, qualifications or experience needed for the job
- standard of work – how well the employee does their job
- attendance record – if it’s accurate and you exclude time off because of disability, pregnancy or maternity
- disciplinary record
(2) Scores – a points system
When you’ve decided on your fair reasons, you need to decide how important each reason is. One way to do this is by giving each reason points.
For example, if you are using skills, qualifications or experience, which reason is more important?
What about something like this
Skills 5 points
Experience 4 points
Qualifications 2 points
Then, when you are choosing who to make redundant you are measuring employees against the same fair reasons.
This might feel uncomfortable, but it will help you be objective and fair.
(3) Share with your employees
You should share reasons for choosing which employees to make redundant with your employees. This is because employees will
- Feel more involved in the process
- Understand how you are making the decision
- Understand that you want to be fair.
Making someone redundant in any business is never going to be easy but these 3 tips will help you make your decision easier, objective and fair.
Find out more about our redundancy toolkit here