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Full Policies Terminating employment pack

Redundancy policy

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A redundancy policy is a framework that outlines procedures for fairly managing redundancies, including consultation, selection criteria, and employee support.

Reading time
How long to understand and implement this policy?
10 mins
Word count
How many words in this policy?
538
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What is a Redundancy policy?

The purpose of a redundancy policy template is to provide a clear and consistent framework for managing the process of redundancies within an organisation.

The policy sets out the procedures to be followed, including consultation with employees and their representatives, selection criteria, and methods of communication. It also outlines the support and assistance that will be offered to employees affected by redundancy, such as training, re-employment opportunities, and severance packages.

The purpose of a redundancy policy template is to ensure that the process of redundancies is fair, transparent, and consistent, and that employees are treated with dignity and respect throughout the process. By having a clear and comprehensive policy in place, employers can minimise the risk of legal challenges and reputational damage and ensure that they comply with relevant legislation and best practice guidelines. 

Best practice timescale for this to be issued
When should this policy be issued?
During onboarding / after changes / planned refresher
Issued by who, to whom
Who should issue this policy, and to whom?
Internally issued to appropriate recipients in your Company
Applicable legal jurisdiction
In which jurisdiction can this policy be used?
Great Britain & NI (United Kingdom)

What legislation and best practice guidelines have been taken into account in the development of this template?

Here are some key UK employment legislation that supports implementing a redundancy policy template:

  • The Employment Rights Act 1996 sets out the rights of employees who are made redundant, including the right to a redundancy payment and the right to be consulted before the redundancy takes place.

  • The Trade Union and Labour Relations (Consolidation) Act 1992 requires employers to consult with employees or their representatives when proposing to make redundancies.

  • The Equality Act 2010 prohibits discrimination on the grounds of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation in relation to redundancies.

  • The Working Time Regulations 1998 require employers to provide notice of termination and any statutory redundancy payment to employees who are made redundant.

  • The National Minimum Wage Act 1998 requires employers to pay employees the statutory minimum wage during any notice period and statutory redundancy payment.

  • The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) require employers to consult with affected employees and their representatives when a business is transferred or sold, which may result in redundancies.

  • The Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011 abolished the default retirement age, meaning that employers must now objectively justify any mandatory retirement age, which may lead to redundancies.

It is important to note that the above legislation is not an exhaustive list and that the specific legislation that applies to an organization may vary depending on the industry, size, and location of the business.

Redundancy Policy

Overview

This policy sets out [Company]’s approach to dealing with potential redundancies.

Scope

This policy is applicable to all employees of [company name].

General principles

Although [Company]’s policy is to avoid redundancies wherever possible, the needs of the business may from time to time require a reduction in the overall number of staff employed or organisational changes that result in some employees being made redundant.

Where this is necessary, we will ensure that:

  • the total number of redundancies made is kept to a minimum; 
  • employees and, where appropriate, their representatives are fully consulted on any proposals and their implementation;
  • selection for redundancy is based on clear criteria that will, as far as possible, be objectively and fairly applied;
  • every effort is made to redeploy or find alternative work for employees selected for redundancy; and
  • support and advice is provided to employees selected for redundancy to help them find suitable work when their employment has come to an end.

Consultation

Where there are no employee representatives

Consultations will be carried out with individual employees as appropriate. Where it is proposed that 20 or more redundancies are required [at the same location] over a 90-day period, arrangements will be made for the election of employee representatives who will be consulted over the proposals and the general process to be followed. Individual employees will still be consulted in respect of their own particular circumstances.

Where there are existing employee representatives

Consultations will be carried out with individual employees as appropriate. Where it is proposed that 20 or more redundancies are required [at the same location] over a 90-day period, consultations will take place with the [name of employee forum] over the proposals and the general process to be followed. Individual employees will still be consulted in respect of their own particular circumstances.

Voluntary redundancy

In order to minimise the need for compulsory redundancies, [Company] may consider requests from employees for voluntary redundancies. Whether or not additional payments will be offered in relation to voluntary redundancies will be a matter for consultation and will depend on the circumstances.

[Company] reserves the right at its absolute discretion to decline requests for voluntary redundancy.

Redundancy selection

The criteria used in selecting employees for redundancy will depend on the existing circumstances and the particular needs of the organisation at the time. However, every effort will be made to construct a fair and robust set of criteria following appropriate consultations.

Alternative work

[Company] will make every effort to redeploy you to suitable alternative work if you are selected for redundancy. You will be informed of all the available vacancies at the time of your selection and will be given an opportunity to discuss with [your manager] which vacancies are likely to be suitable for you. 

While priority will be given wherever possible to employees under threat of redundancy, [Company] reserves the right to select the best available candidate in relation to any given vacancy.

Time off work

If you are under notice of redundancy you will be entitled to a reasonable amount of paid time off to look for alternative work, attend interviews, etc. 

Redundancy pay

Redundancy payments will be made in line with statutory entitlements in force at the time.

This policy [does not] form[s] part of your terms and conditions of employment.

Version: [1.0]

Issue date: [date]

Author: [name, job title]

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redundancy policy