Redundancies and restructuring

In this post-lockdown-Covid-19 world, employers are reflecting on how to ensure their business is financially viable.

For many businesses, the wages bill is the biggest expense and, naturally, employers start to consider whether they can reduce staff numbers in order to be financially viable in the future.

If your business is facing economic hardship, first look at all of your expenses and see what you can trim.  If you have to reduce wages, it is important to use a fair process, and we encourage you to seek legal advice to ensure that you act fairly and reasonably towards your employees, and can justify any restructuring or redundancy.

Employers can consider asking staff to take voluntary redundancy; agree to vary their employment agreements, i.e. take 10% less for a few months, or look at specific positions as being surplus to requirements or needing restructuring.

An employer has to be able to justify the basis for any proposed action such as a restructure or redundancy and why any particular position is being potentially disestablished.  The focus is on the position, not the person, and you may have to cast your net wider than the most obvious candidate for redundancy to ensure that you are being fair.

Which positions get made redundant needs to be objectively justifiable.  There may be some attraction to a simple policy like last on, first off, but is that fair and reasonable?

Above all, you must have a fair process.  Employers cannot make a fair and reasonable decision without consulting with their employees about a redundancy proposal, and be willing to reconsider matters.   An experienced lawyer can help you design a process that will withstand scrutiny.

A redundant employee may have difficulty finding a new job and, therefore, may have little to lose by trying on a personal grievance – unfortunately that is the sad reality.  Whilst personal grievances cannot always be avoided, you can put yourself in a strong position to defend one. The starting point is good advice so you need some assistance is this area please call Louise Foley at Le Pine & Co on (07) 378 5030.


Disclaimer:  This article does not constitute legal or business advice. You should take specific advice from a lawyer before taking any action based on this information.

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