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Help for small firms

Handling small-scale redundancies - A step-by-step guide

Handling small-scale redundancies - Real-life situation: Making a redundancy

You have noticed a steady decline in business in your alterations service over the last six months. You have three seamstresses who are becoming increasingly concerned and have started asking difficult questions about the future of the business.

You had hoped that business would pick up and you could avoid making redundancies, but the situation has become critical from the business's perspective and employees uncertainty.

What do you do next?

You talk to your employees honestly about the situation, discussing alternatives to avoid redundancies but no solution is found. The employees are asking who is going to be made redundant, and rumours begin to surface. You quickly realise that you have to consult further and compile a selection criteria to choose who will be made redundant, aiming to keep the most skilled staff to continue the business.

Having asked staff to comment, you decide to use three areas to help you decide who you will choose:

  • skills and experience
  • disciplinary records
  • standard of work.

You score your employees with one clearly scoring lowest. You invite the employee into a meeting to discuss the criteria and her score. You explain that you do not want to make anybody redundant, but have to preserve the business. Your employee is upset but understanding of the situation. You invite your employee to consider and propose any alternatives that haven't been previously discussed.

At a further meeting, after allowing reasonable time to consider everything, you explain that she has been chosen for redundancy, will need to work her statutory notice period, that she can have time off to look for alternative work and that she will receive a statutory redundancy payment which will be made after the notice period. You confirm all this in writing.

You are upset that you have had to make a well-liked employee redundant, but are relieved you have dealt with the situation instead of allowing the business to spiral into further decline. You can now focus on the future and ways to grow your business.

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