“No one goes into business with a plan to fail. No employer relishes the opportunity to sack employees or make them redundant.
Sadly, at some point in the lifecycle of a business, it is inevitable that such a decision will have to be made and delivered to employees.
For both the company and its employees, how that decision is reached and how the message is communicated can make a huge difference – commercially and legally.
The news that e-commerce giant Amazon is making 18,000 job cuts across its workforce may be surprising because it is one of the biggest success stories of this generation.
A reduction in staff may be perceived as a further loss of confidence in the tech sector, coming on the back of significant job cuts at Meta, HP, Asos, Salesforce and Twitter.
Amazon’s own explanation is that the reduction in staff – largely from its bricks-and-mortar division – is blamed on its competitive recruitment drive over the past few years and the ‘uncertain economy’ which faces businesses right now.
There are many reasons why redundancies will be considered by a company.
For example, reducing overheads, restructuring or ‘right-sizing’, a change in business direction, or the closure of a particular service, location or the company as a whole.
Many redundancies are made each day without public interest or scrutiny.
But where large numbers are being considered, employers should also consider the wider messaging beyond its workforce.
What is the law when it comes to making large-scale job cuts?
Redundancies must follow a fair procedure.
This will usually involve informing employees of the proposed redundancies, consulting with them and following a fair selection process (if necessary).
Then, serving formal notice and making any minimum payments which may be required.
In the UK, where more than 20 employees are being made redundant over a 90-day period, companies have additional obligations.
They must inform the Government of the proposal to make redundancies by completing and submitting a Form HR1.
Failure to do so is a criminal offence.
Employers must also inform and consult on the proposals with appropriate employee representatives, who may need to be elected if not already in place.
This includes trade union representatives where relevant.
Consultation must begin at least 45 days before the first redundancy takes effect where more than 100 redundancies are proposed, and 30 days where there are more than 20 redundancies.
This period of consultation must be genuine and meaningful and it is intended to allow for employers to engage in constructive dialogue with employees.
This will allow time to answer questions, deal with procedural issues and, ultimately, reduce the number of redundancies and minimise the impact of them.
Amazon announced it is cutting more than 18,000 jobs due to “economic uncertainty”
How can employers handle redundancies smoothly?
When it comes to consultation, the best approach a company can take is one of openness, honesty and transparency.
Good communication at the appropriate time is critical.
Many will have heard stories of employees being dismissed over company-wide video calls, text messages or by having their access blocked.
You may also recall the public response last year to the actions of P&O Cruises when it dismissed hundreds of staff members without any notice or following a fair and formal process.
Indeed, it is reported that it was disgruntled employees who leaked the news about the recent Amazon proposals.
Sometimes these things can not be prevented, but an employer who is compassionate, supportive and acts fairly is likely to retain at least some of its valuable reputation.
Being prepared to release a public statement is critical, but any statement should not prejudice or predetermine any consultation process which is ongoing with employees.
If contradictory statements are made to the media, they could be used by workers to cry foul over what should be a fair and genuine redundancy process – not a predetermined sham.
Caution should also be exercised if disciplining employees who share details of a proposed redundancy, especially if done so without malice.
Companies may provide access to colleagues or counsellors in a bid to keep the conversation within the business.
A complex area of redundancy is the pooling and selection of employees
How does redundancy selection work?
One of the more complex areas of redundancy is the pooling and selection of employees.
This is a process which takes time, careful consideration and consultation with affected employees, as well as moderation of any scoring exercise.
The assessment of at-risk employees should be on objective criteria, free from subjective opinion and unequal scrutiny, with scores able to be supported if challenged.
While not all employees’ roles may be at risk, caution should be exercised if preemptively informing staff that their roles are safe before the process is completed.
Although this can be a difficult time of worry and uncertainty for all concerned, taking each step at a time is essential and usually understood if properly explained.
Getting a redundancy right requires planning, process and a good amount of care.
The law is there to guide employers through this difficult time and the support of the Advisory, Conciliation and Arbitration Service (ACAS) and professional legal advisors can make this period more manageable.
It will also, hopefully, help companies to avoid later challenges through the employment tribunals.
Sadly, redundancies happen every day across the country.
If faced with this situation – as an employer or an employee – although of little comfort, you will not be the first and certainly will not be the last.
It is not personal and, in the case of most employees, completely outside of your control."
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