Last reviewed: 23 May 2023
Making employees redundant is never easy or pleasant but is sometimes unavoidable. Employers in the unfortunate position of having to make employees redundant need to ensure that they follow fair procedures and the law as it applies to their business when making colleagues redundant. This will minimise both the stress and distress caused to employees who are redundant and those who are retained and the risk of tribunal claims. The law on redundancy is complex and employers should seek legal advice before proceeding. Here, however, are some considerations for when employees at risk of redundancy are disabled as in these situations, employers need also to ensure that they do not breach the Equality Act 2010 and discriminate against disabled colleagues.
When can employers make redundancies?
Closure of the business
This is when the employer ceases or intends to cease carrying on the business in which the employee is employed.
Closure of a particular workplace
This is when the employer closes down the place where the employee was employed to work, for example a particular branch, site or office.
Fewer employees are needed to do particular work
This is a less clear-cut scenario than when the whole business or part of the business closes but there may be redundancies if, for example:
- There is less work available perhaps because the employer has fewer customers or contracts
- Fewer employees are needed because of new technology or the use of external contractors
- The employer is closing a work site completely and requiring employees who used to work there to work from home. This might mean that employees whose job was solely on site e.g. as reception, security, catering or facility management workers are no longer needed.
Mobility clauses
It is not uncommon for employees of large organisations to have ‘mobility clauses’ in their contracts which allow the employer to move the employee to a different work location. If you can find suitable work for employees who worked in a place that is closing down at another site, these employees are not redundant and can be expected to take the work offered.
However, you should bear in mind that a disabled employee might not be able to re-locate because of their disability. For example, there may be no parking or accessible public transport to the new location, or the disabled employee may live in adapted accommodation they would have to give up in order to relocate to another part of the city or country or indeed to another country. The mobility clause may well place such an employee at a substantial disadvantage because of their disability.
In this situation it is likely to be a reasonable adjustment under the Equality Act 2010 not to invoke this mobility clause. This may, however, mean that you have to make the employee redundant.
Suitable alternative employment – redeployment of employees at risk of redundancy
You must try to find suitable alternative employment for all employees at risk of redundancy. Failure to do so may lead to claims for unfair dismissal. This means that you must identify possible vacancies at the outset to which redundant employees could be transferred. When reviewing the job descriptions of these vacancies remember to take into consideration reasonable adjustments that could be made to those vacancies. For example, could the job be:
- Performed part-time?
- Done from a different location or from home?
- Suitable for a disabled employee if particular equipment were to be provided, i.e. voice recognition software?
- Re-organised so that some non-essential duties were performed by someone else?
Employees at risk of redundancy should be told about all possible alternative positions even if these involve a reduction in salary or grade or relocation. Do not make assumptions about disabled employees; they may be as willing to relocate, retrain or work reduced hours as non- disabled employees if the only alternative is redundancy.
Note that if all or most of your employees were working from home during a lockdown period it is less likely to be reasonable to insist that they have to travel into work in a particular site now. Do think carefully about allowing employees to continue to work from home in redeployed positions even if this wasn’t possible for that particular role prior to the pandemic.
If an employee unreasonably refuses the offer of a suitable alternative position, they are not redundant and so are not entitled to redundancy pay. The onus is, however, on the employer to show that the job is ‘suitable’ and that the employee is being ‘unreasonable’ in refusing it.
Whether or not the job is suitable will depend on objective criteria such as pay, conditions, location and status. Subjective criteria, however, may also make the alternative position unsuitable. Examples might be extra travelling time or the requirement to work shifts that adversely affects an employee’s caring responsibilities for children or elderly or disabled relatives.
Again, if an employee accepts a suitable alternative position, they are not redundant and so are not entitled to redundancy pay provided the offer of the alternative job is made before the old contract ends and the new job starts no later than four weeks after the end of the old contract.
Trial periods
All employees redeployed into a job that has different terms and conditions to their old, redundant post are entitled to a four-week trial period within which to decide if the new job really is suitable.
This trial period is particularly important for disabled employees. If the new post needs reasonable adjustments that have not been implemented when the employee starts work, it would be a reasonable adjustment to extend this trial period to give the employee time to assess the suitability of the post with reasonable adjustments.
If the alternative post is unsuitable and the employee wishes to terminate the contract, they will be treated as having been dismissed at the date their original contract came to an end.
Employees are also entitled to be given a notice period which should be either the period specified in the contract or a ‘reasonable period’ in the absence of such in the contract, but you can pay the employee in lieu of notice if this is permitted by the contract of employment.
Voluntary redundancy
Employers who need to reduce their workforce can ask employees if they wish to take voluntary redundancy. This allows employees who would like to leave to do so, often on an enhanced redundancy terms, i.e. more money than the statutory minimum. It is important, however, to retain the right to refuse requests to take voluntary redundancy so as not to lose employees whose skills and experience you wish to retain.
If you are publishing details of voluntary redundancy schemes remember to ensure that the information is available in alternative formats to disabled people who work for you. Every employee should have the opportunity to consider all the relevant information and put themselves forward for voluntary redundancy.
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