The last few years have been challenging for most businesses, and many are now faced with difficult decisions. The coronavirus lockdowns and the rising costs of living have caused drops in sales/revenue or forced closure during lockdowns. This has left businesses financially strained and unable to afford to keep on all their employees, whilst other businesses have experienced a decline in demand and no longer need all of their employees.
If you are faced with the decision to make any number of employees redundant for the first time, then it can be a daunting task – one of the most difficult you may ever be confronted with – but you don’t have to handle it alone.
In this blog, Guardian Support looks at the redundancy letter process for employers. If you are in the position of needing to notify employees of their redundancy, we’re here to help.
How to Write a Redundancy Letter
One of the most important things you need to get right during a redundancy process is documentation.
The letters and process referred to below relate to individual consultation where you are proposing to make less than 20 employees redundant in a 90-day period.
If you are proposing to make 20 or more employees redundant in a 90-day period, you will need to engage in collective consultation, which is a very prescriptive process that requires the election of employee representatives for consultation, specific information you must provide in writing to the representatives during the consultation, with set minimum timescales for consultation of either 30 days or 45 days before any dismissal due to redundancy is confirmed.
It is strongly advised that you seek expert advice and guidance if you need to engage in collective consultation.
Guardian Support can help you through every step of the redundancy process to ensure that you are following a fair process and avoiding any legal risks. We can also make the ordeal a little bit easier for everyone involved.
Our HR Consultants are fully trained and experienced in dealing with all manner of sensitive workplace issues, including redundancies, and can be at the other end of the phone for advice or on-site to assist with meetings whenever you need them.
For individual consultation, you will ordinarily be required to write and present a minimum of three different letters to any employees that you are proposing to make redundant, and they will need to comply with employment laws in order to avoid being confronted with an unfair dismissal claim.
Redundancy Letter One: Announce the redundancy
The announcement can be done via a meeting or over the telephone if employees work remotely or on furlough rather than issuing an announcement letter.
As with any formal procedure, your first step should be to give your employee fair notification of a proposed redundancy exercise and explain the reasons for the proposed redundancies.
The job at risk of redundancy letter, or announcement, will need to clearly explain that the business will make redundancies and that they are one of the employees at risk.
You’ll also need to provide a fair and justified reason for why redundancies are being proposed. For many businesses at the moment, it may be that the impact of coronavirus has left the business in financial trouble so they have to cut costs or close the business or a particular department down altogether.
Other valid reasons for making an employee redundant can include; there no longer being a need for the work they carry out at the business or a proposal that the job role no longer exists as work is to be done in a different way, for example, use of new machinery or technology.
You should give the employee as much information as you can about the consultation process that will be taking place.
To close this letter, you should assure the employee that you are doing everything possible to avoid making compulsory redundancies.
Employee Redundancy Letter Two: Inviting the employee to a formal consultation meeting
This letter will be your opportunity to invite the employee to an individual consultation meeting at a specific date, time and place.
You should outline the purpose of the meeting, which will be to discuss the fact that their role is at risk of redundancy, consider any alternative options, and let them know that they can bring a work colleague or trade union official to the meeting with them.
You should also give them the opportunity to raise any questions they may have ahead of this meeting.
Letter of Redundancy Three: Inviting the employee to a further and potentially final consultation meeting
This letter should outline discussions had in the first consultation meeting and respond to any queries or concerns raised by the employee in the first meeting.
It should also explain that following this further meeting, you should be able to confirm whether they are redundant or not.
Again, it should give them the opportunity to raise any further questions they may have ahead of this further and potentially final consultation meeting.
Redundancy Notice Letter Four: Confirming that the employee is being made redundant
This is the final step in the redundancy process and should only be used to confirm redundancy if you decide to proceed with the redundancy.
In this letter, you should confirm that the employee is being made redundant following consultation and provide them with the required notice as per their contract of employment.
You will need to let them know:
- Their leave date and if they are required to work their notice or not
- What notice pay they will receive and any tax and NI liabilities on this
- If they have any accrued holiday due and whether you wish them to take accrued annual leave during their notice period or to be paid for it following their leave date
- How much Statutory Redundancy Pay they will receive and that a Statutory Redundancy payment is free from tax and NI deductions
- Any further pay they are owed such as a commission or bonus payment
- How they can appeal against the decision and the timescale for any appeal to be received
You can also use this opportunity to inform them of any additional support that you have available to them during this difficult time, such as our Employee Redundancy Support Service.
What is Guardian Support’s Employee Redundancy Support Service?
We recently launched this service for employers who have had to make employees redundant and want to provide them with professional support aimed at increasing their chances of finding employment.
We will give your employers one-on-one time with our recruitment expert, who will review their CV and cover letter templates, provide comprehensive feedback, conduct a mock job interview and answer any questions they may have about the recruitment process.
If you want to ensure that your redundancy letters are watertight, then you should seek the expertise of a qualified HR consultant. Alternatively, we can provide bespoke redundancy letter templates.
Our consultants have years of experience advising on fair redundancy processes and writing legally compliant redundancy letters and can work with you to create bespoke letters for your employees that will greatly reduce any legal risk and take the pressure and added workload away from you.
Call us now on 0845 874 4087 for more information on this service.