No matter how long you've been a business owner, redundancy is still extremely tough. Not only is it difficult to let affected employees know that they are being made redundant, you have to get independent legal advice to ensure you're doing it correctly.
Part of the process of proposed redundancies is a risk of redundancy letter.
In this article, we'll explore redundancy letters and highlight their importance. To help save time, worry and stress, we've also included a risk of redundancy consultation letter template.
If you need immediate support with redundancy letter templates, collective consultation, compulsory redundancies or more, then why not leave your contact details and our award-winning team can help.
What types of redundancy letter are there?
For employers there are three main redundancy letter types, each with a different function. Each of these types applies to a certain stage of the process, as follows:
- Job at risk of redundancy letter.
- Redundancy consultation letter.
- Redundancy notice letter.
What is an at risk of redundancy letter?
If you’re considering making employees redundant then you need to serve notice. This is a notice that the employee is at risk and is different to the contractual notice that is usually given at the last meeting when selection for redundancy has applied.
An at risk of redundancy letter is the starting point of your redundancy process. Other details such as calculating statutory redundancy pay come after your final redundancy consultation meeting.
Your letter should include all other relevant information, including details on the individual consultation process, how and where to find more information, and the process moving forward (more on that later).
What makes an at risk of redundancy letter important?
An at risk of redundancy letter is extremely important for a number of reasons. Mistakes early in your redundancy selection process can increase your exposure to litigation. For example, failure to provide proper notification could result in a claim of unfair dismissal at an employment tribunal.
Any potential redundancy is difficult for employers, so giving an employee early notice that they might be selected for redundancy is good practice.
Remember, there are numerous valid reasons for redundancy, including:
- Operational changes.
- The arrival of new technology.
- Changes in the market.
- In order to reduce business costs.
Ensure you don’t rely on letters to get you through the redundancy process. You need to have a consultation meeting with staff (or any employee representatives), and follow the procedure, for it to be fair. For avoidance of doubt, always refer to the ACAS code of practice.
What is the procedure for sending an at risk of redundancy letter?
If you're letting an employee (or employees) know that they might be selected for redundancy then you should have a clear selection process. Having fair selection criteria is key to avoiding litigation further down the line.
Always use written letters in conjunction with a consultation meeting. Our sample at risk of redundancy letter we have below should be the starting point for the full process.
Once you’ve sent this letter, you need to begin consultation with your employees or their representatives. In these meetings, you should discuss alternatives to redundancies and make time to listen to the suggestions of your staff. Any consultation meeting will be accompanied with a separate consultation letter.
At the end of the consultation process, if you still wish for the redundancy to go ahead you will need to issue a letter. This one is a redundancy notice letter, you can download a sample here. This marks the final stage of the redundancy process.
When should I use an at risk of redundancy letter?
You should use the letter below as a means to begin discussions regarding redundancy. Make sure you have considered alternatives prior to issuing this letter and selecting employees, as redundancy should be a last resort.
What is Included in This at Risk of Redundancy Letter
A good at risk of redundancy letter must cover several key points. These include:
- An explanation of the reasons why redundancies are being considered in your business.
- The reason why the individual receiving the letter is being considered for redundancy.
- Details on the process following the letter, particularly consultation.
- Details of other available roles and how to apply for them (if application is necessary).
- The final date of consultation and when the employee can expect to hear whether their position is being made redundant or not.
We cover all of these areas in our template letter. To summarise:
- Use this letter as the initial notification that you are considering making a role redundant
- Issuing this letter alone, without following proper process and holding a consultation will likely result in a claim of unfair dismissal
- Following the consultation period, you must also issue a final redundancy notice period letter
The below template will help keep you compliant while making redundancies. Remember to personalise the letter to your business needs. There is further at risk of redundancy ACAS advice.
Download your at risk of redundancy letter template by clicking the button below.
What is the redundancy consultation process?
A redundancy consultation process is an essential legal requirement of any fair dismissal or redundancy procedure. A consultation ensures there is a collaboration between your employee and you. Passing clear information between employers and employees with regard to why redundancies are being proposed and whether they can be avoided is crucial.
Your at risk of redundancy letter is the first letter and first step.
Redundancy consultation letter
This second letter will invite all at-risk employees to a consultation. There is no maximum extent permitted when it comes to a consultation period, so you may have to send more than one letter.
Employees are entitled to a consultation with you if you’re making them redundant. This involves speaking to them about:
- The reason behind their potential redundancy.
- Any alternatives to redundancy
If you are having to make up to 19 redundancies, there are no rules about how you should carry out the consultation meeting. If you are making 20 or more redundancies at the same time, the collective redundancy rules apply.
Final redundancy consultation meeting
This final meeting will wrap up the redundancy process and deliver a final decision. If the decision is to make the employee redundant, it is followed up with a redundancy notice letter. This third and final letter should inform each individual that you selected them for redundancy. Also, you need to let them know what the next steps will be.
Download Your at Risk of Redundancy Letter Example
No business wants to get to the point where they need to make people redundant. Unfortunately, companies do restructure or even close parts of the business down, and that’s when it happens.
Don’t risk mistakes that could cost you dearly. When dealing with such a situation, using a good at risk of redundancy letter template can help ease the process for everybody. Download yours here.
Call our 24/7 HR advice line today so we can help with any further documents you need to put together 0800 124 4995.
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