Posted: 9. July 2012 by: Rupert Tennant

Dealing With Redundancy as a Small Business Owner

The likelihood of resulting in redundancies is one of the most dreadful occurrences for most small business owners. However, this is no reason to worry. Small business owners feel a duty of care and sense of obligation towards members of the team with whom they have most likely spent several years working closely. It becomes hard to lay off some people, especially without a solid reason.

So, how do you make someone redundant? There are three key gourds on which one can process a fair redundancy. These are economic, technical and organizational factors. Basically, these broad categories allow the employer scope to justify the redundancy process at any time. For instance, the event of losing a major client may be a justifiable reason for redundancy. Even more, the introduction of a new piece of machinery or software that can drastically reduce the number of man-hours is also a good ground to stand on when implementing any redundancy.

Regardless of any justification that may be prevailing, you need to follow the correct process to avoid unfair dismissal claims. It is important to put into consideration to alternatives to redundancy and who else it may affect inside the organization. Ideally, the process involves an initial discussion or letter followed by two formal meetings with additional consultation periods.  The first meeting should be aimed at making the employee aware that redundancy is being considered. Additionally, the reason for this should clearly be stated and elaborated to the concerned employee.

The employer has a duty to make the employee aware of any other role available at the moment. Even if the employee may not necessarily like the task, let them know and choose before leaving the organization. Otherwise, if you really do not have to go through the redundancy, just avoid it at all cost.

Providing time for both parties to reflect on viable alternatives to redundancy may also prove helpful. The consultation period may play a key role in taking the heat out of what can be an emotional and difficult process. When the employee agrees to the prevailing circumstances, then it is time to calculate the salary or wage arrears. It is unprofessional to resort to redundancy if at all you cannot be able to settle what you may be owing to the employee being laid off.

It is important to get advice on how to go through the whole process amicably. If anything goes amiss, there is a huge likelihood that you will have to pay a number of enormous penalties. Moreover, if the process is not solved with the right approach, it could lead land in the employment tribunal. This may be time-consuming and costly to tackle.

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