Restructure and Redundancy Procedures

Help with Reducing Staff Levels

Do you need help with redundancy procedures or help to restructure your company? SVC Human Resources can help with it all, including things like difficult selection criteria for your redundancy procedures.

Of course we like to focus on business growth and development. But situations can arise where you may have to venture into this complex and stressful area. If so, relax as SVC can help you.

Organisation chart making changes for restructure or redundancy

Making changes for restructure or redundancy

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Does This Describe Your Current Situation?

  • Managing people when your future business is uncertain means you are worried about making changes?
  • Changes in your company mean you need to restructure, and you don't know how to handle the people issues?
  • Redundancies seem inevitable in your company and you are confused about what you must do?
  • You have an HR team but you feel you need extra expert support during a restructure or redundancy period?

If you answer ‘yes’ to any of the above, then read on. 

Spending the next few minutes reading the following may save you a lot of time, expense and frustration.

Restructure Procedures

At some point in the future you might have to restructure your organisation. Indeed, this could be for any number of reasons including (for example):

  • The need to realign your business to reduce its operational costs.
  • Deciding to change your organisation structure to improve business performance.
  • Reorganising specific departments to fulfil a new contract.

Whatever the reason, you will need to discuss it with your management team. As an example, to agree your ultimate goals and how best to achieve them.

Plan Strategically

As you know, strategic planning is vital to your company’s continued success. In any event, once you have decided what to restructure, you must plan how this will affect your employees.

Most people generally dislike change, especially when they are on the receiving end of it! Consequently, constant communication with your employees about what will happen is so important.

Communicate Effectively

Wherever possible, communication of your restructure procedure is best done face-to-face. For example, by a company update meeting, or a departmental meeting.

Therefore, we recommend you document your restructure procedure in writing; for example as a:

  • Personal letter
  • Company email
  • Statement on your company intranet or noticeboard.

Whatever method you choose, don't delay! In particular, avoid time for "Chinese whispers" to create half-truths (or worse). Indeed, gossip can disrupt your business, and can cause:

  • Demotivation.
  • Anxiety.
  • Mistrust amongst your employees.

Employee Impact Assessment

Will your restructure affect an employee's contract of employment (their terms and conditions)? If so, as part of your procedure you will need to go through a consultation process with the affected employee(s).

If you have a unionised workforce, you will first need to meet with the Union to discuss what you are planning to do. For instance, plan the way forward with them and their union members. Nevertheless, the length of your consultation will depend on:

  • Your policies.
  • The contract of employment.
  • How many employees the proposed restructure will affect.

Selling a Business

Don't Forget the People!

"There are people-related laws you must consider if your company is either:

  • Selling the business (or part of it) to another company.
  • If your company is buying a business or part of a business.

If your sale or acquisition involves employees, you must follow TUPE. This is because it is a legal requirement on the buyer and seller of any business. In particular, it comes under the Transfer of Undertakings (Protection of Employment) Regulations.

In brief, TUPE requires both the buyer and seller of a business to protect jobs and employment rights. This means all employees or workers (both full-time and part-time).

TUPE is a very complex piece of legislation and case law has changed the content of this regulation many times over the years.

Subsequently, it is imperative to follow the mandatory requirements in the process. This means:

  • From consultation with employees.
  • To confirmation of restructure documents at all stages of the process.

Due to the very nature of TUPE, the subject of restructure is not an everyday process. Therefore it is understandable why some companies get it wrong. In addition, it could be a costly mistake if you fail to follow the correct legal steps.

Get Help with HR

SVC's Human Resources experts can help you understand and get you through this process. We will hold your hand throughout and take the fear out of getting it wrong.

Redundancy Procedures

You should always think of job roles becoming redundant and not employees. Furthermore, it's essential not to be subjective in your dealing with redundancies. For instance, it is essential to:

  • Take a person out of any decision - focus on the job role.
  • This is always a challenge for whoever must make the decision.

Redundancy comes at difficult time and signals the opposite of business growth. Subsequently, company policy is to avoid redundancies wherever possible.

Dealing with redundancy is stressful. To begin with it affect's people's lives, it is complex, and it can be expensive. For the most part it is stressful for all involved in the process.

But due to internal or external change, you may need to go through redundancy at some point because of:

  • A reduction in the number of job roles required.
  • Organisational changes that result in some jobs no longer required.
  • Job roles of a specific type no longer required.

You must prepare a sound business rationale for your proposed redundancies. Specifically, make sure your rationale is well documented as part of your reduncancy procedures.

Business Rationale Checklist

Include in your business rationale in your redundancy procedure documentation. Don't forget to include consideration for redundancy alternatives such as:

  • Reduced hours
  • Short time working, or
  • Lay-offs.

Redundancy Procedures - Consultation

You must consult your employees (and where appropriate their representatives) on any proposals. In particular as part of your recruitment procedures, you may need to carry out your first "at risk" consultation with a team or the whole organisation. In a similar manner, in some instances it may be better to do this on an individual basis. It depends on your company and circumstances.

Afterwards, you will likely carry out "at risk" consultations with individual employees. Doing so in a confidential manner allows you to answer specific questions.

More Than 20 Redundancies?

Do your plans affect more than twenty job roles over a ninety-day period? In this event, your redundancy procedures must include arrangements to be made for the election of employee representatives. Having done this, then consult with:

  • The elected representatives about the proposals and the general process.
  • Individual employees in respect of their own particular circumstances.

Contingencies Checklist

The process of redundancy can take several weeks. Indeed, in some cases it can take even longer if there are many jobs involved. Therefore, it is important to:

  • Prepare a plan and timeline to complete the process
  • Allow for contingency plans
  • Be prepared for unexpected circumstances!

Voluntary Redundancy? 

You may be able to minimise the need for compulsory redundancies if you offer voluntary redundancy. The level of voluntary redundancy payments you offer will depend on your circumstances. Of course, this will be a matter for your company to decide. Also, this is voluntary for employees and also your company; you have the right to decline requests for voluntary redundancy.

managers, selection criteria for redundancy

Selection Criteria

Dependent on your circumstances, you may need to determine a redundancy selection criteria to score for selection. You must base this on clear criteria which must be objectively and fairly applied.

The selection criteria you use in deciding on employees for redundancy will depend on:

  • Existing circumstances.
  • The actual needs of your company at the time.

A Note About Selection Criteria

You must make every effort to construct a fair and robust set of selection criteria, taking care not to discriminate. This stage can be difficult, especially if you do not have good employee records.

You will then have to inform individuals affected, and invite them to a meeting. At this meeting, you must tell them their scoring. By the way, the reason why the redundancy procedure and the selection criteria process must be fair and robust, is that an employee has the right to appeal against:

  • Their scoring.
  • Being selected for redundancy.

If an appeal is submitted, this needs to be heard and managed before any notice of redundancy is served.

Re-deployment

You must make every effort to consult with affected employees. Where possible, look at redeployment of an employee to any suitable alternative roles. You must also make all alternative roles available to any affected employees. So, throughout the process, inform employees of all available vacancies in the company.

Important Note on Re-deployment

  • Give priority to any employee at risk or under notice of redundancy.
  • You have the right to select the best available candidate in relation to any given vacancy.
  • Consider all employees on maternity leave as they have priority.
Redundant team looking for jobs

Time Off Work 

Employees under notice of redundancy can take a reasonable amount of paid time off to:

  • Look for alternative work.
  • Attend interviews, etc.

You need to consider how you deal with this. It may be important to cover the existing workload to avoid having a negative impact on the business.

Notice Period Checklist

Depending on your circumstances, you may decide to waive the right to insist on employees working their notice, and either:

  • Place the employee on garden leave instead, or
  • Make a payment in-lieu of their notice.

This will be dependent on their contract of employment and any policies you have in place.

Minimum Statutory Redundancy Entitlement 

You may have to pay the minimum statutory payment to employees with two or more years' continuous service. Your company may also decide to enhance this redundancy payment. But you must confirm the amount of redundancy payment in writing to the employee.

Do You Need More Help?

Restructuring and redundancy are very complex areas. Both need effective planning and need managing by an HR expert. It is likely that you will need guidance, support and advice on these areas.

The HR team at SVC have managed many client restructure and redundancy projects. We can support you:

  • In the early planning stages for a new structure or redundancy.
  • Right through to the start of a new structure or each stage of the redundancy process; through to.
  • Exiting any affected employees through a redundancy process.

SVC Human Resources can save you the worry and burden about HR and provide you with all the correct documentation.

Find Out How We Can Help Your HR Needs

For a no-obligation confidential chat about how can help your company:

  • Message us privately by using the Contact Us button below.
  • Or call us on 01206 262117.

Disclaimer

The information contained in this web page is provided for general information purposes only. It should not be construed as legal advice. You should not act or refrain from acting on the basis of any content included on this web page without seeking professional, legal or other specialist advice by qualified practitioners. If you have a specific human resources issue, please contact the SVC Human Resources team for individual advice on your particular circumstances.

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