Collinson Grant supports clients in managing redundancy exercises by insisting on meticulous planning before any announcement is made. This is intended to ensure that the legal issues are understood and that the communication of the news of the redundancies is as effective as possible. Specifically, we offer skills and experience in:
Creating an action plan and timeline for a redundancy exercise
Calculating likely and actual severance costs
Briefing managers on their responsibilities and necessary actions
Drafting communications to representatives, employees, customers and external agencies
Framing strategies for formal dialogue with employees’ representatives and consultation with individual employees
Arranging election of employees’ representatives, running meetings with them and ensuring follow-up actions take place Developing criteria for selection for redundancy that are legally compliant and support the needs of the business
Conducting consultative meetings with individual employees
Organising appropriate support for outplacement
Assisting in planning and implementing transfers.

1. Managing redundancy

2. Contents
Our approach
1
Managing redundancy: definitions, constraints and basic practices
1
Ready reckoner for statutory redundancy payments
9
Redundancy consultation flowchart
10
Large-scale redundancy planning – vital action points
11
Large-scale redundancy – actions for the day of announcement
12
Outplacement
12

3. Name of the document
Our approach
Collinson Grant supports clients in managing redundancy exercises by insisting
on meticulous planning before any announcement is made. This is intended to
ensure that the legal issues are understood and that the communication of the
news of the redundancies is as effective as possible.
Specifically, we offer skills and experience in:
creating an action plan and timeline for a redundancy exercise
calculating likely and actual severance costs
briefing managers on their responsibilities and necessary actions
drafting communications to representatives, employees, customers
and external agencies
framing strategies for formal dialogue with employees’
representatives and consultation with individual employees
arranging election of employees’ representatives, running meetings
with them and ensuring follow-up actions take place
developing criteria for selection for redundancy that are legally
compliant and support the needs of the business
conducting consultative meetings with individual employees
organising appropriate support for outplacement
assisting in planning and implementing transfers.
Managing redundancy: definitions, constraints and
basic practices
The nature of ‘redundancy’
For most legal purposes, redundancy occurs when:
the employer has ceased, or intends to cease, business, overall or in a
specific location, or
requirements have diminished, or are expected to diminish, for
employees to do work of a particular kind, overall or in a specific
location.
‘Redundancy’ is not separate from ‘dismissal’: it is simply a reason for
dismissal. In many cases, employees may not only be entitled to a redundancy
payment but may also have the right to claim unfair dismissal. This is one
important reason why there are certain procedures and practices to be
observed by managers when communicating and implementing redundancies.
1

4. Statutory redundancy payment
Eligibility
Employees should have two years’ continuous service. There is no upper age
limit.
Payment
Payment is based on a scale, working back from the date of dismissal:
per year of reckonable service from age 41 - 1½ weeks' pay
per year of reckonable service from age 22 to 40 - 1 week's pay
per year of reckonable service below age 22 - ½ week's pay
Cut-offs and maxima operate, so that a statutory redundancy payment cannot
exceed a certain amount:
a maximum of 20 years’ reckonable service and, therefore (in
conjunction with the scale above), a maximum of 30 weeks’ pay (see
the ready reckoner at section 3 below);
a maximum value on ‘a week’s pay’ (reviewed annually in February).
It is permitted to pay enhanced redundancy payments which exceed these
cut-offs and maxima.
Alternative work
When an offer of ‘suitable alternative employment’ is made but the employee
rejects it, the employee’s entitlement to a redundancy payment is only
maintained if the refusal is ‘reasonable’. The reasonableness or otherwise of a
refusal is judged primarily by reference to the employee’s personal and
domestic situation.
An offer of another job that matches the employee’s skills on the same terms
(pay, et cetera) in the same place would normally be ‘suitable’. So, unless the
employee has quite compelling personal considerations for refusing it, doing so
would quite probably be ‘unreasonable’ and would disqualify the employee
from receiving a payment.
An offer on inferior terms or in a different place will often cast doubt on the
‘suitability’ of the employment. Any reduction in pay that is more than trivial
will definitely make the offered employment unsuitable.
In such
circumstances, the reasonableness or otherwise of a refusal is irrelevant.
Trial period
There is provision for a trial period of at least four weeks in any new job
(whether ‘suitable’ or not – see above) that an employee undertakes on the
redundancy of the original job. The employee is deemed to have accepted the
new job when the trial period expires. If, during the trial period, the employee
terminates, for whatever reason, or the employer terminates the employment
for a reason arising out of the change, the employee is treated, for redundancy
2

5. Name of the document
payment purposes, as dismissed from the original job for redundancy (so
receiving a redundancy payment, unless the new job was suitable and the
termination unreasonable). However, the original dismissal may still be
unfair.
Notification of, and consultation about, ‘mass’ redundancies
When is consultation with representatives about ‘mass’ redundancies
required?
Collective consultation with the representatives of the affected employees is
required when 20 or more redundancy dismissals are proposed to take effect
at an establishment within 90 days or less.
An employer’s failure to comply with this obligation attracts a ‘protective
award’ of up to 90 days’ pay per affected employee.
The appropriate representatives are those of the trades union recognised for
the group or category of affected employees or, if employees are not covered
by recognition, elected colleagues. So, it is quite common to consult at an
establishment with a ‘mix’ of representatives.
For this purpose, the definition of ‘redundancy’ is broader than that for
redundancy payments. It extends to proposed changes to terms and conditions
of employment as well as the outright elimination or reduction of jobs and
employees.
In deciding whether or not there are 20 or more dismissals proposed, the
employer should disregard the prospect of ‘volunteers’ or of affected
employees agreeing to changes – the key is whether, in the absence of
consensus, contracts would have to be terminated in order to effect the desired
change(s). In this context, the number of proposed redundancies does not
need to include fixed-term contracts that would be expiring in any event.
Prerequisites for consultation
Consultation can only commence once:
any necessary representatives for ‘non-union’ categories have been
elected and
all representatives have been supplied with prescribed information
about the employer’s proposals, the reason(s) for them and the
planned process for implementation (a ‘section 188’ letter).
With regard to the provision of information, the representatives must also be
given a copy of the Form HR1 that, under a separate statutory provision, the
employer is required to send to the Insolvency Service of the Department for
Business, Innovation and Skills to notify it of the planned cutbacks.
When should consultation commence?
Consultation should commence at least 30 days before the planned date for
the first of the proposed dismissals.
3

6. This increases to 45 days if 100 or more redundancies are proposed.
Nature and implications of consultation
Consultation should be ‘with a view to reaching agreement’ (actual agreement
is not obligatory) and should cover ways of:
removing the need for the proposed redundancies
reducing their number
mitigating their consequences.
The first two of these objectives entail the likely need for the employer also to
debate with representatives the business considerations that underlie the
proposal for redundancies and, sometimes, to consider alternative business
solutions put forward by the representatives.
Because of this subject-matter for consultation, neither the redundancies
themselves nor the underlying business ‘drivers’ should initially be described in
terms that suggest that a definitive decision has already been made.
And the very need to consult with representatives about larger-scale
redundancy exercises also means that an employer that quickly acts
inconsistently with that notion and indicates that decisions have been made,
whether by proceeding to deal with individual employees or through
operational measures, runs the risk of being held to have breached the duty of
collective consultation.
So, although it is not necessary to continue consulting with representatives for
a full 30-day or 45-day period, observance of the statutory duty will generally
mean a need for some restraint in moving ahead with at least the visible signs
of change. Sometimes, this causes frustration for employers. Almost always,
it has implications for establishing timelines and action plans.
The completion of consultation with employees’ representatives, whether with
agreement or not, does not remove the need for subsequent consultation with
the individual employees affected.
Unfair dismissal
The law on unfair dismissal can impinge on an individual employee’s
redundancy in the case of:
unfair application of the selection process for redundancy
no, or insufficient, consideration of alternative employment
an absence of, or inadequate, consultation with the employee.
The following sections deal with basic procedures and practices to avoid
difficulties with the points above.
4

7. Name of the document
Selecting the people for redundancy
Pools of selection
Sometimes a redundancy exercise leads to the complete removal from the
organisational structure of a specific type of job, regardless of how many postholders there are. Subject to an employer’s satisfaction of the other
considerations (alternative employment and adequate consultation), this
situation in itself tends to cause few legal problems.
But an exercise may also entail the reduction in size of a section or group of
employees with similar or transferable duties – a ‘pool’. Here, there is a need
to select for redundancy some employees rather than others. Pools of
selection should, in principle, be as broad as possible. They should comprise
employees who have similar jobs and could undertake each other’s duties. The
pool should not be designed to exclude particular employees or jobs without a
valid reason.
Seeking volunteers for redundancy
There is no obligation on an employer to request applications for ‘voluntary
redundancy’.
But finding volunteers has the advantage of avoiding much of the antagonism
and the exposure to dispute or litigation that can arise from ‘compulsory’
redundancies.
Against that has to be weighed the likelihood that many volunteers may have
long service and, therefore, entitlement to large payments on severance, and
that some may still be of great value to the business.
For these reasons, any voluntary redundancy scheme should feature a clear
right of veto or rejection by the employer. Of course, that right should be
exercised sparingly and for demonstrably good reasons. Excessive, tenuous
reliance on it may well increase the chance of a successful claim for unfair
dismissal from somebody who has been made redundant because a volunteer
has been turned down.
Setting criteria for selection for ‘compulsory’ redundancy
It is necessary to set criteria so that the requisite number of employees can be
selected from the pool as being at risk of redundancy. The criteria should be
as objective as possible. Typically these would include relevant job experience
and knowledge, volume of work, accuracy of work, range of skills, flexibility,
co-operation and initiative, attendance (of course excluding any absence
related to a disability or pregnancy/maternity) and length of service.
It is important to define the scope of each criterion (in part, to ensure that its
‘components’ do not overlap with those of another criterion, so that a
particular attribute or deficiency is not considered twice for the same
employee).
5

8. Within each chosen criterion, there needs to be a grading or rating
mechanism. Generally, this is expressed numerically, but it is important that
the level attached to each number or grading should be defined in some way.
Application of the selection criteria
Every employee in a selection pool should be independently assessed or scored
under the chosen criteria, and without reference to extraneous considerations,
on a standard form or matrix. The evaluation should be done by a superior
who is reasonably familiar with the work and record of the employees
concerned. Consideration might be given to the use of two assessors or scorers
with such familiarity (if so, the assessors should complete the assessment
separately and then come to a joint conclusion).
In any event, all documentation should be retained, both for the purposes of
internal consultation and possible appeals (see below) and for use in any
subsequent legal proceedings.
When all the assessments have been done and a final assessment figure for
each employee has been arrived at, every employee in the pool should be
ranked and those with the lowest totals should be provisionally selected for
redundancy or placed at specific risk of redundancy. The use of such
expressions is important in view of the need for consultation with the
individual.
Alternative employment
Employers are under a duty to consider and, where practicable, to offer
employees opportunities for alternative employment. This duty is not confined
to alternative work that is ‘suitable’ in the sense described for redundancy
payment purposes. Even if the alternative work attracts less pay and/or has
different duties, it should be at least notified to the employee for his or her
consideration.
The duty concerning alternative employment is not confined to the
prospectively redundant employee’s current place of work. A multi-site
employer should normally check all its locations for vacancies. And
consideration might also be given to contacting any associated companies
about job opportunities.
Consultation with individual employees
Why?
It is important to consult an individual about his or her prospective dismissal
for redundancy, whether that arises from the total removal of a type of job (or
a workplace) or there has been selection from a ‘pool’.
This is simply because the law of unfair dismissal requires that, before any
decision to terminate employment is taken (on any ground), an employee
should be informed why such a decision is being contemplated and should be
given a chance to argue against it. And, in the context of redundancy, the
simple fact that employees may be aware that their employer has a
6

9. Name of the document
‘redundancy situation’ within the business does not necessarily mean that they
know the reason why they, specifically, are at risk.
So, there is a need to make them aware why they personally risk the loss of
employment and to allow them to consider and discuss the matter. If
consultation with individuals is inadequate, or not meaningful, a claim for
unfair dismissal is far more likely to succeed.
The obligation to consult with each ‘at risk’ employee individually applies
whether or not there has been earlier relevant consultation with employees’
representatives (see 2.3 above).
To fulfil the need for consultation, provision for an absolute minimum of two
meetings with an ‘at risk’ employee will normally be necessary.
Initial meeting
The initial meeting will be to explain to the employee that he or she is at risk
of dismissal because of redundancy and, more importantly, why. So, the
manager who attends the meeting must be familiar with and able to explain
the reasons, particularly if the employee has been selected from a pool of
colleagues. This meeting is principally about supplying information to the
employee so that she or he can subsequently reflect on the situation and, if
desired, ask for any clarification and/or challenge managerial thinking before
a final decision is made. It is important to make clear that, at the point of
this meeting, a final decision has not been made and that the situation will be
discussed further with the employee.
Subsequent meetings
Subsequent consultative discussions, whether in one or more meetings, are
about ensuring that the employee has had a reasonable opportunity to air any
concerns about the basis of his or her proposed dismissal for redundancy and
that any realistic opportunities for alternative employment have been
canvassed.
The length, shape and content of these ‘follow-on’ meetings are dependent on
the particular circumstances and on the attitude of the employee. So, they are
not easy to ‘script’ in any great detail. However, that fact should not preclude
preparation and anticipation of an employee’s likely lines of challenge or
questioning. Provided that it does not result in a managerial style that
suggests a fait accompli, such an approach makes for a ‘smoother’ meeting
that is less likely to antagonise than one which is faltering, and also increases
the prospect that matters raised will be resolved quickly.
Confirming redundancy
The final consultative meeting (or one that is likely to be final) should be
preceded by a letter to the employee, notifying him/her of the arrangements,
specifying the basic purpose of the meeting, and stating that a possible
outcome is the confirmation of dismissal for redundancy.
If, at this meeting, there are no points raised, or if there arises no compelling
reason to rethink the employee’s prospective redundancy, the fact of dismissal
7

10. (whether immediate or at some future time) and the right of appeal should be
confirmed to the employee. At this point, she or he can be told that a letter of
dismissal will be given or sent to him or her in due course, with a statement of
payments (it is not consistent with the meeting having still been part of the
consultative process to produce a letter of confirmation at this point).
Written confirmation
The subsequent letter confirming the redundancy and the payments due to the
employee (so far as a statutory redundancy payment is concerned, a statement
of entitlement is legally required) should reiterate his or her right of appeal
and specify the addressee and timescale for any appeal that the employee
might submit.
Overall procedure
Two points are worth making about all consultative meetings:
An employee does not have a statutory right to be accompanied by
anyone. However, if accompaniment by a colleague (or, where there
is a recognised union, a union official) is requested, it is generally
difficult to find a good reason for refusing it.
Immediately after each meeting, it is sensible to make handwritten
notes to summarise what was said.
Appeals
Unless an employer’s own procedures say otherwise, an appeal does not have
to be considered and determined before the specified date of dismissal and will
not ‘postpone’ the date of dismissal.
However, an employer generally has an interest in ensuring that any possible
difficulties or weaknesses with its approach are considered and resolved
internally – minimising the risk of litigation. So, in this respect, the facility
for a pre-dismissal appeal is less likely to inhibit an employee from appealing
on the basis that ‘there’s no point, it’s too late’.
In any event, an employee should normally be invited to a hearing to explain
and clarify the grounds of his or her appeal.
The manager hearing and deciding an appeal should be seen as ‘independent’
of the one who made the original decision. Normally, this person will be the
dismissing manager’s line manager or a higher or equally ranked manager
from another function.
The outcome of the appeal should be confirmed to the employee in writing.
8

11. Name of the document
Ready reckoner for statutory redundancy payments
Service (years) 2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Age (years)
17
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18
1
1½
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19
1
1½
2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20
1
1½
2
2½
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21
1
1½
2
2½
3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22
1
1½
2
2½
3
3½
-
-
-
-
-
-
-
-
-
-
-
-
-
23
1½
2
2½
3
3½
4
4½
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24
2
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5
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25
2
3
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6
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26
2
3
4
4½
5
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6
6½
7
7½
-
-
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27
2
3
4
5
5½
6
6½
7
7½
8
8½
-
-
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28
2
3
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5
6
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7
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8
8½
9
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-
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29
2
3
4
5
6
7
7½
8
8½
9
9½
10
10½ -
-
-
-
-
-
30
2
3
4
5
6
7
8
8½
9
9½
10
10½ 11
11½ -
-
-
-
-
31
2
3
4
5
6
7
8
9
9½
10
10½ 11
12½ -
-
-
-
32
2
3
4
5
6
7
8
9
10
10½ 11
13½ -
-
-
33
2
3
4
5
6
7
8
9
10
11
11½ 12
14½ -
-
34
2
3
4
5
6
7
8
9
10
11
12
12½ 13
35
2
3
4
5
6
7
8
9
10
11
12
13
13½ 14
36
2
3
4
5
6
7
8
9
10
11
12
13
14
14½ 15
37
2
3
4
5
6
7
8
9
10
11
12
13
14
15
15½ 16
38
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
16½ 17
39
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
17½ 18
40
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
18½ 19
41
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
42
2½
3½
4½
5½
6½
7½
8½
9½
10½ 11½ 12½ 13½ 14½ 15½ 16½ 17½ 18½ 19½ 20½
43
3
4
5
6
7
8
9
10
11
44
3
4½
5½
6½
7½
8½
9½
10½ 11½ 12½ 13½ 14½ 15½ 16½ 17½ 18½ 19½ 20½ 21½
45
3
4½
6
7
8
9
10
11
46
3
4½
6
7½
8½
9½
10½ 11½ 12½ 13½ 14½ 15½ 16½ 17½ 18½ 19½ 20½ 21½ 22½
47
3
4½
6
7½
9
10
11
48
3
4½
6
7½
9
10½ 11½ 12½ 13½ 14½ 15½ 16½ 17½ 18½ 19½ 20½ 21½ 22½ 23½
49
3
4½
6
7½
9
10½ 12
13
50
3
4½
6
7½
9
10½ 12
13½ 14½ 15½ 16½ 17½ 18½ 19½ 20½ 21½ 22½ 23½ 24½
51
3
4½
6
7½
9
10½ 12
13½ 15
16
52
3
4½
6
7½
9
10½ 12
13½ 15
16½ 17½ 18½ 19½ 20½ 21½ 22½ 23½ 24½ 25½
53
3
4½
6
7½
9
10½ 12
13½ 15
16½ 18
19
54
3
4½
6
7½
9
10½ 12
13½ 15
16½ 18
19½ 20½ 21½ 22½ 23½ 24½ 25½ 26½
55
3
4½
6
7½
9
10½ 12
13½ 15
16½ 18
19½ 21
22
56
3
4½
6
7½
9
10½ 12
13½ 15
16½ 18
19½ 21
22½ 23½ 24½ 25½ 26½ 27½
57
3
4½
6
7½
9
10½ 12
13½ 15
16½ 18
19½ 21
22½ 24
25
58
3
4½
6
7½
9
10½ 12
13½ 15
16½ 18
19½ 21
22½ 24
25½ 26½ 27½ 28½
59
3
4½
6
7½
9
10½ 12
13½ 15
16½ 18
19½ 21
22½ 24
25½ 27
28
60
3
4½
6
7½
9
10½ 12
13½ 15
16½ 18
19½ 21
22½ 24
25½ 27
28½ 29½
61+
3
4½
6
7½
9
10½ 12
13½ 15
16½ 18
19½ 21
22½ 24
25½ 27
28½ 30
12
12
13
14
12
13
14
15
13
14
15
16
17
11½ 12
11½ 12
14
15
16
17
18
12½ 13
12½ 13
15
16
17
18
19
20
13½ 14
13½ 14
16
17
18
19
20
21
14½ 15
14½ 15
17
18
19
20
21
22
23
15½ 16
15½ 16
18
19
20
21
22
23
24
15½ -
16½ 17
19
20
21
22
23
24
25
26
16½
16½ 17
17½
17½ 18
20
21
22
23
24
25
26
27
18½
19½
21
22
23
24
25
26
27
28
29
9

12. Redundancy consultation flowchart
10

13. Name of the document
Large-scale redundancy planning – vital action points
Confirm local practice on any trades union representation: full-time
officials or employees’ representatives?
Confirm the proposals for closure – the target dates, numbers,
negotiating mandate
Decide on the ‘constituencies’ and number of elected representatives
for groups of affected employees not covered by union recognition,
and on the post-announcement timescale for completing the electoral
process
Agree on an approach to enquiries from
comment’/’Nothing to add to press statement’?
the
press:
‘No
Confirm the key managers and the retention terms they will be
offered
Tell the key managers of these terms
Confirm managerial responsibilities: Steering Group, Negotiating
Team, and Support
Confirm the key employees and the terms they will be offered to stay
on
Agree on a plan for communication:
Confirm audiences: employees, customers, suppliers, media,
‘authorities’, others
Prepare a ‘core statement’
Agree on core internal and external scripts
Prepare an initial message for contacting any full-time union
officials
Prepare an announcement to employees
Make a list of employees absent because of sickness,
maternity, holiday, et cetera. Prepare letters to these people
Prepare Form HR1
Prepare the section 188 letter
Prepare answers to Frequently Asked Questions and circulate
them to key managers
Consider: sabotage, discipline and service to customers
Brief the key managers on the announcement and their role
Prepare general communication to other locations
11

14. Draw up an initial, broad timetable for consultative meetings with
employees’ representatives.
Large-scale redundancy – actions for the day of
announcement
Advise managers, supervisors, any local union representatives and
shift workers to be present at meetings as mentioned below
Brief managers and supervisors
Brief any full-time union officials
Meet local union representatives
Agree on the date of the next meeting with full-time and local
representatives (timing of meetings will be subject to any need to
elect representatives for non-union categories)
Meet all the employees present and inform them of the intentions
Brief the staff in reception on how to respond to enquiries from the
media
Issue a news release to the media
Send Form HR1 to the Department for Business, Innovation and
Skills
Get the sales team to inform customers
Advise other plants of the announcement
Contact absent employees
Send a confirmatory letter to all employees containing, if necessary,
arrangements for nomination and election as employees’
representatives.
Outplacement
Outplacement is the term used to describe various initiatives designed to
facilitate an employee’s, or former employee’s, prompt transition into another
desired position, career or vocation (or the training for such).
The principal forms that we offer are individual counselling or coaching and a
workshop on ‘job-search skills’. Although there are some overlaps in broad
subject-matter, there are substantial differences of emphasis and approach.
Individual counselling or coaching is, as its title suggests, geared to the
particular individual and his or her needs and wishes. Of course, the
programme deals with such matters as finding job opportunities, preparing a
curriculum vitae, and interview techniques. But, because of its exclusive
nature, it can also devote time to the person’s reaction to redundancy, so that
a positive outlook and demeanour are (re-)established, and to his or her
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15. Name of the document
personality traits and generic vocational interests, so as to explore suitable
options for the future. For these reasons, individual outplacement is provided
by a qualified psychologist.
The workshop, which is intended for a number of employees simultaneously,
can only touch relatively lightly upon the reactions and ‘make-up’ of individual
members of the group. Its focus is on the practicalities of job opportunities
and selling oneself, whether on paper, by phone or face-to-face. However,
with the introduction of appropriate external presenters, it can be extended to
deal with subjects such as managing finances, pensions and investments, and
state benefits.
Both types of programme normally feature the option for follow-up sessions or
advice. However, this process tends to be easier to manage on the individual
outplacement programme.
Our experience is that these offerings to departing or former employees are
well received by the participants and viewed favourably by the staff staying on.
They go some way to improving employee relations and settling things down
after a redundancy exercise. So, outplacement is a natural and sensible thing
for an employer to consider.
The type of programme that is appropriate will, ultimately, depend on the
employer’s wishes, the grade of employee and the attitude of the employee(s).
Given its considerably higher unit cost, it is fair to say that the use of the
individual outplacement programme tends to be confined to senior executives
or employees to whom the employer has a particular loyalty, or where the
legitimacy of the redundancy may be in some doubt.
300513
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Transitional management, Value chain analysis, Workforce planning
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