I need to make staff redundant — how can I do it fairly? Joe Beeston answers this Financial Times reader’s question
In a recent Financial Times – Your Questions feature, Joe Beeston, Employment Partner at Forsters, addressed a pressing concern for business owners facing financial pressures following changes to agricultural and business property relief: how to reduce headcount fairly, legally, and with compassion.
Joe emphasises that sensitive and lawful handling of workforce reductions is essential to protect businesses from legal claims and preserve employee morale. His advice underscores the importance of forward planning, clear communication, and strict adherence to employment legislation.
Key takeaways include:
- Check internal policies: Any redundancy policies and procedures should inform the process.
- Ensure genuine redundancy: Cost-saving measures must reflect a real reduction in workforce needs.
- Follow consultation requirements: Collective consultation (lasting at least 30 days) is mandatory where 20 or more employees will be made redundant over 90 days. With fewer than 20 redundancies, individual consultation is essential before decisions are made.
- Apply fair selection criteria: Avoid bias and discrimination by using measurable, job-related factors.
- Consider alternative employment: Think about redeployment opportunities and listen to proposals from employees.
- Calculate payments correctly: Statutory entitlements must be honoured, including notice and redundancy pay.
Joe also highlights the legal risks of getting redundancy wrong: unfair dismissal and discrimination claims can lead to significant financial and reputational damage. But beyond the legal implications, redundancies are deeply personal. Joe stresses that clear, respectful and transparent communication is essential. Being honest about the reasons for change, engaging meaningfully with employees, and offering support throughout the process can help preserve trust and morale.
Read the full Q&A on the FT (behind a paywall).
Forsters’ Employment team combines deep expertise in UK employment law with a thoughtful, people-first approach. We help businesses plan and implement workforce changes that are not only legally sound, but also respectful and transparent, helping to preserve trust and morale.
