Analysing post lockdown business strategies and putting a redundancy plan together

With the economy opening back up over the next month or two many businesses are now in a position where they will be able to start planning for what the ‘new normal’ will look like. 

For some this will necessitate restructures and other changes as staffing requirements will now be different when compared to life pre-Covid.

Getting this right will initially involve some ‘Organisation Design’ work where a business looks at the market for their products or services post lockdown, compares it to the market prior to Covid, and also considers how they expect the market to develop in future, which may also have changed in the post lockdown world. This analysis will then enable the organisation to produce a robust plan to thrive both short term and in the future.

In addition to this, the organisation and the market you operate in will have evolved in general over time and there may be certain things that have always been done but that no longer add value so the organisation design work is an opportunity to review this, along with the strategy, processes and staffing in general so as to make the company as efficient, competitive and successful as possible.

In our Organisation Design workshop where we help organisations with restructures and forming new strategies we often start by encouraging participants to ask themselves the following question:

‘knowing what I know now, how should I structure this company / department to be the most effective it can be in today’s market and also the future as I see it?’

Although it is a well trodden path we find it is still as relevant today as it was twenty years ago to then guide the organisation through a SWOT and PESTLE analysis to give structure to the process and facilitate them forming plans that will enable them to thrive.

For further details of SWOT, PESTLE and organisation design work please see our previous article on Business Planning. We received excellent feedback regarding the article and strongly recommend that organisations regularly carry out this type of work to ensure their strategy is as effective as it can be to give them the best chance of achieving their  organisational goals.

Once the company has considered the structure that best suits their requirements and the current and expected future market conditions, Job Descriptions should be put together for any new or changed roles to make sure employees make the required changes in the way they carry out their roles for the organisation to be successful.

Job Descriptions are not a legal requirement but will significantly help you to select individuals into roles later in this process and also ensure that employees are focused on the required tasks. It will also significantly help the organisation to manage them effectively.

When producing Job Descriptions they should be worded so as to describe what you need the individual to do based on current and expected future requirements, not what has happened in the past. In the subsequent recruitment selection process this will then allow you to fit the person to the new role rather than adapting the role to the existing person. This is crucial if the new structure and strategy is to succeed.

One outcome of reviewing JDs as described is that the focus of some roles may need to change, which can be unpopular but it is your business and if that is what you need to happen then you are entitled to make the changes.

This approach can be tough for all involved, you may have someone who has been a good performer in the past and want to keep them because of that but the harsh reality is that they must be able to do what the business needs of them now and how you forecast things to be in the future and it is perfectly reasonable for you to expect that to happen and then manage people accordingly.

The Job Descriptions we see that organisations have put together in the past are often a bit rubbish – sorry to be blunt but it’s true. This is such a shame because a well worded job description can be a really useful aid to recruitment, management, performance management, employee development and many other areas so if yours could do with a spring clean we’d highly recommend you spend some time on this.

If you would like some examples of well worded Job Descriptions please contact us. Likewise, If you’d like us to support you to produce high quality JDs it would be relatively inexpensive for us to do this on a consultancy basis.

Once you have updated the strategy, decided on the optimum structure and then put job descriptions together it may be that redundancies are required, either to reduce the size of the workforce or to change it so you have the right knowledge, skills and experience in place for the brave new world. We’ll look at the redundancy process in a little more detail now.

Devising a robust plan to manage redundancies

If you have worked with us before you will be aware of our most used quotation regarding Tribunals, which comes directly from an employment Judge:

‘If you want me to find in your favour at Tribunal then follow the law, follow your policy, and act reasonably at all times’.

Employment Judge

Redundancies are one of the areas where there is an increased risk of legal action and tribunals so it is important to get the process right, and follow the judge’s advice.

With regards to following the law, there is actually very little specific law in this area. Tribunals generally refer to the ACAS Code of Conduct for redundancies and expect companies to follow it unless they have a very good reason. Not doing so is likely to result in losing the tribunal and also an uplift of up to 25 percent in the compensation awarded as you will be penalised by the judge for failing to follow a reasonable process. Ouch!

You may or may not have a redundancy policy, there is no requirement in law to have one.

Having said that, clearly it is worth considering adopting one if you are planning to make redundancies, then communicating it to employees who are affected by the redundancy proposal at an early stage in the process so everyone, management and employees included, know what to expect.

If you don’t currently have one, according to CIPD a redundancy policy should include:

• an indication of its scope (in other words, who the procedure applies to)
• details of consultation arrangements
• an introductory statement of intent towards maintaining job security wherever possible and the measures for minimising compulsory redundancies
• guidance on selection criteria and relocation expenses if applicable
• details of severance terms
• assistance with job seeking
• counselling
• severance payments
• appeals against selection for redundancy.

At 186hr we have access to the CIPD model redundancy policy which we would be happy to provide. The cost is £99 plus vat. Please contact us for details.

Alternatively, for £399 plus vat we have produced a fully inclusive guide that includes comprehensive advice of the redundancy process from start to finish, the CIPD model redundancy policy, plus ACAS and CIPD approved model letters for every eventuality that you can adapt to your circumstances. Uniquely in the market the guide also comes with two hours of consultation with a highly CIPD qualified senior HR consultant to advise and adapt the process to your needs.

If you are not quite ready to commit to purchasing such a document and advice just yet, we have produced a free guide 8 Steps to Making Redundancies that shows you a breakdown of the basic steps.

Getting back to the judge’s quote, the final requirement is to act ‘reasonably’ and this one is generally the most important. Following 186hr’s guide will equip you to achieve that, as well as helping you to act fairly and – crucially, especially to those employees who remain employed – be seen to have acted fairly. You may have heard of the very real impacts of ‘survivor syndrome’ following redundancies at work.

Our director and Associates have made literally hundreds of employees redundant over the years, following fair and robust processes. They have never lost a Tribunal or had the process we follow for redundancy criticised by an employment judge or ACAS. In fact ACAS have been very impressed with our approach whenever they have been involved in a case.

It should be noted that failure to follow a reasonable process may mean you are liable for claims even if there are good grounds for the redundancy dismissal(s). As above, this may also result in an additional compensation award of up to twenty five percent.

When considering redundancies there is a general principle that you should seek to avoid or reduce the need for making people redundant where possible. To achieve this, before putting an action plan together ACAS recommend that you consider measures such as:

• Widespread offer of Voluntary Redundancies i.e. company or department wide, not targeted at certain individuals.
• Offering flexible working e.g. part time.
• Temporary reduction in working hours.
• Temporary layoffs.
• Reduction of temporary or agency staff.
• Recruitment freeze
• Restricting overtime.
• A programme to retrain any employees who may be made redundant so they can carry out other roles, or others who wish to move to other parts of the business.

If, after considering alternatives, you believe that redundancies can’t be avoided it is then time to put a specific plan together once you have:

• Decided what the new structure needs to look like;
• Produced updated Job Descriptions for all roles affected;
• Considered whether you need a redundancy policy.

The first stage of the process is to put an announcement together for those employees affected by the redundancy proposal. We haven’t enough space in this article to go into detail about that today but this, and all other stages of the process are explained fully in the above guide, along with the relevant model letters, policies and calculation tools.

Whereas we will not be covering the rest of the redundancy process in detail today, within your plan there are various considerations that you need to be aware of as follows:

Unions and Representatives

If your organisation recognises a trade union then you should ensure that any agreements with them are adhered to, and the union is involved as early in the process as possible – certainly before you have made a decision to start the redundancy process.

Where your organisation does not recognise a trade union but individuals have made a personal choice to be members of a union themselves, those employees are entitled for a Representative of that union to accompany them in the consultation process. You do not, however, generally need to involve that union in more wide-ranging discussions about the redundancy programme, devising the plan, or the decision making process i.e. the union’s involvement should be limited to the consultation process that is being followed with their member(s) only.

Where the company does not recognise a union and individuals are not members of a trade union, whether they are entitled to be accompanied by a Representative in consultation meetings is a grey area in law. We recommend that you allow individuals to bring a work colleague into consultation meetings if they wish to. Such colleagues are often referred to as the individual’s Representative, or companion.

Numbers, Timescales and Locations of redundancies

There is no specified minimum consultation timescale for proposed redundancies of under 20 people at any individual ‘establishment’.

In these circumstances, at 186hr we recommend a 15-day consultation process as described in our guide. It is, however, possible to carry out the whole process in 7-10 days if needed as long as you can show that the consultation process followed was meaningful.

If you are proposing to make at least 20 roles redundant in any 90 day period at any one establishment then Collective consultation must start at least 30 days before any employees are served notice of redundancy. This increases to 45 days where you are proposing to make at least 100 roles redundant in any 90 day period. Collective consultation rules are clear, but organisations are often a little hesitant about the process e.g. regarding how to elect Representatives. Full details of this and all other requirements explained in the rest of this article are included in our guide.

When proposing to make at least 20 redundancies you must also inform the Redundancy Payment Service, who act on behalf of the Department for Business, Energy and Industrial Strategy.

With regards to the above term ‘at any one establishment’ this doesn’t necessarily mean the company as a whole. If the organisation has various locations spread throughout the country then each location may be classed as a different ‘establishment’. Where this is the case, the organisation may be able to avoid the statutory 30 day or 45 day process.   

In order to make the consultation ‘meaningful’ as described above, we recommend that you hold weekly consultation meetings. Where you are required to consult for 30 or 45 days you may still decide to hold consultation meetings weekly but legally you don’t need to. We often find that most alternative proposals and queries are raised in the first 2 or 3 meetings so to have 6 or 7 meetings over a 45 day period can become awkward for all concerned so you may wish to move to fortnightly after the first couple of meetings.

Pregnant employees / Adoptive Parents / Maternity leave

Care should be taken to fully include pregnant employees, individuals on maternity leave and adoptive parents in the redundancy consultation process even if they are not currently in work as they receive a high level of legal protection in any redundancy process.

A risk assessment must be completed for pregnant employees to ensure issues such as any increased stress levels, lifting, or excessive travel are managed appropriately. Also, it is a requirement that individuals on maternity leave whose role is being made redundant should be appointed into suitable vacant roles ahead of others who are at risk, irrespective of performance or other factors.

You may also have read about some legal proposals that were made in 2020 that further strengthen maternity rights and the rights of pregnant employees during the redundancy process. So far they have not been passed into law but clearly they may be by the time you need to start a redundancy process so watch this space! If and when this happens we will cover it in an online article in plenty of time for you to make any required changes to your process.

You should take HR advice if any new mothers, pregnant employees or employees going through the adoption process or who have recently adopted are to be affected by a redundancy proposal. The penalties for getting this wrong are quite punitive.

Slotting

If a role in the organisation’s new structure is very similar to a role in the current structure, and the same number of people will be required to carry out these roles in the new structure then those individuals can normally be ‘slotted’ into the new roles without the need to place their roles at risk of redundancy and follow a selection process, even if there are small differences between the old and new roles.

Clearly if the new roles are very different to the old roles then a redundancy consultation process should take place.

Pooling

As explained in detail in previous articles, the ‘pooling’ requirements in the redundancy process can be a little controversial, but it is important to always consider this legal requirement to ensure the correct roles are placed at risk of redundancy.

You may already have an idea of which people you would ideally prefer to make redundant, and that may well be the outcome. However, when you consider which roles are no longer required it is very important to avoid any accusations that you have targeted specific individuals or groups without being able to justify such a decision. So you should consider putting all people that do the same role or similar roles at risk of redundancy and then following a selection process to decide who is appointed. This is ‘pooling’.

The requirements for pooling may be broader than you think, as the decision of who to place at risk should be based on what the role holder actually does, not just the job title or department they work in. This often results in a far larger ‘pool’ of employees whose roles are placed at risk than the employer would ideally like, and this aspect of the redundancy process can prove frustrating for management so if in doubt take advice. In our experience, failing to pool roles is one of the main areas that leads to complaints and potential legal action following a redundancy programme.

Apprentices

Generally apprentice roles should not be made redundant unless there really are no other alternatives so please take advice if you feel this is necessary.

Tupe

If you are proposing redundancies that are connected to an acquisition that involves a Tupe transfer of employees in to the organisation please take advice. Tupe rules are complicated and specialist legal advice will likely be needed.

If you would like to discuss business planning, redundancies or any other HR issues please do not hesitate to contact us