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Redundancy: Employers should show a human touch

Redundancy: Employers should show a human touch

When you’re going through a redundancy exercise before and through outplacement or executive career coaching support, you could concentrate so much on procedures that you might forget that you’re dealing with individuals. Employees will have different questions and concerns, and there are some things that you may be able to do to make things easier for them. Remember, it’s not all about headcount reduction and cost savings. The reputation of the business is on the line, too, and a shoddy process will reflect badly.

Individual element for fair dismissal

Employers must carry out individual consultation. This means arranging consultation meetings with affected employees. The whole point of a consultation period is that no decision is reached until employees have had a chance to put forward their views and suggestions.

In some cases where, for instance, employees are doing the same or similar roles and there is a headcount reduction, an employer will have to carry out an objective selection process. This will require assessing individuals against their peers.

Suitable alternative roles for employees must be considered as well. If a suitable alternative role is available, the employee should be allowed to apply for the role. Sometimes employers just give employees a list of jobs and do little to support.

Outplacement

There is no legal obligation to offer outplacement services, but many departing employers will really appreciate the assistance. Your long-standing employees might not have had any interview experience for a number of years, let alone updated their C.V. Even for executives who have had more exposure to the job market, outplacement services provide people with a chance to brush up on their skills, access hidden jobs market information and discuss change of career.

Enhanced redundancy payments

Paying an enhanced redundancy payment, above the statutory minimum, will of course provide some financial protection for the employee going forward. Usually, any extra payment will be conditional on the employee entering into a settlement agreement waiving their rights to bring employment claims. The employee must seek independent legal advice on the agreement.

Other ways of helping

Each case is going to be different, but here are a few examples.

If the employee is being paid off in lieu of notice, you could agree, instead, to allow the employee to work their notice or be put on garden leave. Sometimes it may be easier to find another job while an employee is still employed. Extending the termination date may also assist someone who has visa immigration issues.

If you provide medical cover and an employee is receiving ongoing treatment you could check whether it’s possible to extend cover.

Senior executives may have been awarded deferred stock or cash as bonuses. Often, employees who are made redundant will, according to the plan rules, be treated as ‘good leavers’ and the deferred awards which otherwise would be forfeited continue to vest on the vesting dates or are accelerated. This will not always be so though, and sometimes employers have considerable discretion.

Another issue for senior executives could be restrictive covenants. Restrictive covenants could preclude employees for a certain period of time from joining a competitor, soliciting clients or employees and dealing with clients. In some cases, particularly if the employee is not a real threat to the business, the employer may agree to waive or amend some of the restrictions.

Author: Matt Gingell

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