How Do Small Businesses Deal With Redundancies?

Dear <<First Name>>

Making jobs redundant is rarely a pleasant experience, but sometimes it has to be done, for the future survival of the business. If it has to be carried out, it is essential that it is done correctly, to avoid issues and to make the process as simple and as painless as possible, for everyone involved.
This issue of HR Watch is full of advice on how best to carry out redundancies in small businesses, as the process differs from larger organisations. I hope that you won’t have to make anyone redundant this year, but if you do, I hope that these tips will help you to get through it.

Best wishes,

T: 01635 600 305
M: 0771 865 7175


How Do Small Businesses Deal With Redundancies?

If you have to make redundancies they should normally be for one of the following reasons.

  • You have ceased (or intend to cease) carrying on the business for the reason for which you employ someone, or you plan to stop trading in the location where they work
  • You don't require your employees to carry out work of a particular kind any more
  • You don't require your employees to carry out work of a particular kind in a specific location any more.

In small businesses, where fewer than 20 people and their roles are being made redundant within a 90-day period or less, the process to follow is different to dealing with larger numbers of redundancies. With fewer people, consultations need to be carried out with each individual and the steps to follow are below.
Make a Plan
Draw up a draft framework of what you are thinking of doing and in what order. This should include:
1. Briefing your managers – talking with your managers will help smooth the process and help you work out what support they need. If you are the owner of the business and the only manager, you may need help and/or training
2. Talking to your staff – you're legally required to consult meaningfully with your staff. This is a very specific way of discussing the situation with staff, so working out how, when and what to talk about is important. It is essential that you use good communication and empathy, while you follow this process. Treat people with dignity and respect and think carefully about the message that you need to get across. You should explain to the whole business why you’re doing what you’re doing, so that they feel included, rather than being kept in the dark. A good reason for being open about what is happening is that when your staff hear that jobs are being made redundant, other employees may offer to take voluntary redundancy. They may decide that if the size of the business is being reduced and that changes are being made, that they themselves would rather leave.
3. Choosing redundant staff carefully – you need to plan how you will fairly and consistently decide which jobs will go. You also need to plan how you will select people for redundancy from those posts.  It may be necessary to identify selection criteria, if a number of employees have the same job title.
4. Alternative jobs – employees who are at risk of redundancy may apply for other vacancies you have in the company.  If selected for one of the vacant positions they will be entitled to a trial period in their new role.
5. Giving redundancy notice and pay – this should be part of your discussions and, handled well, can be reassuring for your staff and your business planning.
6. Remembering notice period rights – being mindful of special rights your redundant staff have during their notice period to look for jobs or training will help you plan ahead. Notice should not be given until the consultation process has come to an end.
7. Allowing for staff to appeal against their selection for redundancy – this can give you a chance to be absolutely sure you've done the right thing, and give you the opportunity to put it right if not.
8. Focussing on your business’s future – remember that redundancy is meant to help you get your business back on track. You'll need to plan how the business will operate when staff leave and communicate your vision for the future of the business to the staff who are staying. Your goal is not to disrupt the whole of your workforce, just because one or two roles are being made redundant. Remember it is vitally important to devote time to the people who will continue to work for you. They may feel vulnerable and uneasy about the future of the business and the security of their jobs.
Follow this process and, should the necessity arise, you’ll find it easier to work through any redundancies that you need to make, and ensure a better future for your business. But do seek advice if you are uncertain of any of the steps required.


Practical HR – Is it Really Time for Redundancies?

Despite last year having been a really successful one for Bill’s business, he does have one concern. The industry has changed a lot in the last few years and Bill isn’t sure that he has enough work for Brett, his onsite support engineer. Brett used to spend all his time visiting clients to deal with IT problems they had with their computers, servers or printers. He’s great at fixing problems when he can see what’s going on and he loves working face to face with his clients.
But more and more of Bill’s clients now want remote support for their IT. They don’t want to wait for Brett to drive to their offices to fix the problem – they want it done now! For a while Bill has been offering remote solutions and the number of visits that Brett is doing is declining. Bill is wondering if he can really afford to keep him on in his role, or if he should let him go.
Luckily, Bill has heard that if you’re going to make someone redundant, you need to talk to them first, to explain the situation. He calls Brett into his office. “I have something difficult that we need to discuss,” he says to a slightly nervous looking Brett. “The thing is, I don’t know if we can keep you employed full time, with the way things are going. I don’t want to let you go, as the clients love you and the service that you give them, but...”
Before he has a chance to finish, Brett lets out a relieved sigh. “I’m so glad you brought this up, Bill,” he says. “I’ve been meaning to ask you if I can go part-time for a while now, and wasn’t sure that you’d agree!”
Sounds like a great solution!

Employment Law Update

There are lots of changes coming up that might affect your business, so here’s a summary of them.

Changes to National Minimum Wage – These changes take effect on 1 April.

Apprenticeship Levy – This applies to companies with a pay bill of £3million or more. Check here to see how this could affect your business.
Worker or Self-Employed? – This is a really interesting and important case that has recently lost its Appeal at the Court of Appeal. The plumber had been providing work since 2005, personally, and therefore is a worker, not self-employed contractor, and therefore entitled to workers’ rights such as holiday pay. You can read the details here.
Changes to Salary Sacrifice (also known as Salary Exchange Schemes) – The rule are changing on 6 April 2017 and you can find out how here.
If you’re unsure about how any of these issues affect your business, or you have any pressing HR concerns, do feel to get in touch for a completely confidential chat by calling us on 01635 600305 or clicking here to email us.


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