Employment: Rate of Redundancies is on the increase

New data from the Office for National Statistics (ONS) reveals that the rate of redundancies has increased and is now close to pre-pandemic levels. What can be done about redundancy?

Redundancies increase

In the March 2023 Labour market overview, the ONS found that, between November 2022 and January 2023, the number of people reporting redundancy in the three months increased by 0.2 per thousand employees compared to the previous period, to 3.3 per thousand employees. There are approximately 32.8million people in the UK working population, so we calculate this to be around 10,000 people out of work in just three months from November to January.

Vacancies decrease

The ONS data showed job vacancies dropped by 51,000 to 1.2 million in the three months to February, but unemployment remains historically low, and largely unchanged on the quarter, at 3.7%. However, if the number of people out of work has increased and the number of job vacancies has dropped, then we expect the number of unemployed will increase in the months to come.

Why does Redundancy happen?

Redundancy can occur when an employer’s business, or part of the business has ceased to operate and/or the employer’s business has moved to a different place; the business’s need for work of a particular type has ceased or diminished meaning the role/s are no longer required. It is important to note that in redundancy situations, it is the role, not the person who is made redundant.

The need to follow a correct procedure

The rules on redundancy are unclear and open to interpretation which can cause people to be subjected to unfair practices and processes. The obligations on the employer when making 20 or less roles redundant is to merely act ‘fairly and reasonably’ when looking at the candidate/s who are at risk.

In situations where 20 or more people are made redundant a more regulated process is required (please contact us for details if this applies to your situation).

The guidance suggests that in order for a redundancy situation to be fair and reasonable, consideration needs to be given to the following:

• Is there a genuine redundancy situation/need?
• Have the correct employees who are likely to be affected by the redundancy been identified?
• Has particular consideration been given to identifying those who undertake similar work?
• Has there been a fair selection?
• Has a consultation taken place where you have been shown your scoring and/or allowed an opportunity to consider any suitable alternative roles?
• Has suitable alternative employment been identified?

When can an employee be made redundant?

An employee is made redundant if their dismissal is due to the fact that the employer has ceased (or intends to cease) work of a particular kind. A redundancy can also take place if there is a restructure or a reorganisation or in order to save costs.

Employers are under an obligation to consult with the employees at risk of redundancy

There is no actual requirement for a step process or a number of consultation meetings unless the redundancy is for 20 or more roles. However, it is good practice to meet with the individuals at risk to keep them abreast of the developments and seek their assistance with any possible resolutions. Within this there is the expectation for the employer to carry out a fair selection process, typically using a ‘selection matrix’ when identifying those who are risk of redundancy. The factors involved in the matrix should be fair and reasonable with a focus on objective factors rather than subjective views where possible.

The employer is also obliged to consider all reasonable alternative employment opportunities that are available within the business and look to offer these to the employee as an alternative; subject to them being roles that the affected employee is deemed able to carryout. This assessment may well be achieved by interviewing for the available roles.

You’ve been made redundant - employees

If you feel that you have been unfairly selected, for example you are the only person within your team placed at risk and selected, you may have been unfairly dismissed. If you have been made redundant we can help. Please remember there are strict time limits in Employment claims and you should take good free legal advice as soon as possible.

If you are facing redundancy, or you have already been made redundant, you may feel overwhelmed, stressed or unsure about the process and you may need to speak to an experienced employment solicitor who can answer your questions and provide a professional perspective about your situation and any decisions still to be made. Many, many people face redundancy and our team is here to help. Lawson-West’s expert employment solicitors and lawyers have significant experience and can help clients, like you, through this very traumatic time in your life.

Making redundancies - employers

If you are an employer, we often find that even when the redundancy selection process is correct companies are leaving themselves open to costly employment tribunal claims by simple oversights that could be avoided. Making redundancies is not a decision that should be taken lightly, it can be very costly and there is a lot to consider. It is recommended that employers seek professional legal advice prior to beginning the process to ensure the correct procedures are followed and the best possible outcomes are reached.

Our employment team provides the appropriate advice and guidance in relation to Redundancy. If you believe you have a situation where you require free initial legal advice, please contact us on telephone 0116 212 1000, alternatively complete the free Contact Us form and we will get in touch as soon as possible.

Notes: See the ONS report here

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