Difficult decisions

What you should know when it comes to redundancy

A difficult conversation

When running a business, it’s unlikely you’ll have to do anything more difficult than making employees redundant. Telling somebody that they no longer have a job, particularly if they are not at fault, can be very challenging, but it’s a scenario many business owners will encounter at one time or another.

Consulting employees

Ensuring that all affected employees understand the process, and are made fully aware of the circumstances that have resulted in them having to be made unemployed, is very important. If you fail to consult employees, you could be taken to an employment tribunal further down the line.

If fewer than 20 employees are to be let go, there are no set rules to follow, but it is generally considered good practice to consult employees, give them adequate time to digest the news, and begin the process of looking for a new position elsewhere.

If 20 or more employees are to be made redundant, then you must follow collective consultation rules, the exact details can be found on the gov.uk website.

Giving staff notice

Giving staff notice is an important part of the redundancy procedure - you need to given them enough time to come to terms with the decision and to look for another job.

  • If an employee has been working with you for between one month and two years, then you will need to give them at least one week's notice
  • If they have been employed for between two years and 12 years, then you should give one week for every year they have been an employee (so someone that has been with you for eight years will need eight weeks’ notice, for example)
  • If they have worked for the company for 12 or more years, then they will require a notice period of 12 weeks.

It is worth noting that these periods are just the minimum legal requirement – you can give longer should you prefer.

Redundancy pay

If an employee has a contract, they may be entitled to some kind of payment. Working out how much an employee is owed is very important. If you don't give them the agreed sum, or if you fail to pay within six months, the employee could take you to a tribunal. You can use this calculator to see how much each employee is likely to be due.

Help with difficult situations

NatWest Mentor can help you through the employment process from start to finish. We can help with difficult conversations and ensure you're aware of all the right processes to help you through.