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Question regarding redundancy as a valid reason for termination of employment

Discussion in 'Employment & HR' started by RSS_UK, Jan 11, 2017.

  1. RSS_UK

    RSS_UK UKBF Contributor Free Member

    Posts: 38 Likes: 3
    Good afternoon all,

    First of all, apologies if my English is not that good, not a UK national.

    I have a micro company with less than 5 employees including myself. All of them are employed on a part time basis and they all work from home as the job requires a lot of office work. Last year I employed two new members for our team thinking they would help increase productivity and therefore, revenue for the company (we work in the arts and entertainment industry) but after almost 10 months of service, things are not going as expected. I now find myself having to face the economical burden of 4 salaries each month (including mine) while the income we are generating and the bottom line had remain the same and actually decreased with a bigger team.

    I feel like I have no other choice but to reduce staff costs, something I've been trying to avoid for as long as possible. If I dont end the employment of those two persons I welcomed on our team last year asap my company's cash flow will be seriously damaged in just a few months.

    I want to give these employees their termination of employment notice as soon as possible so they can both finish at the end of this month and was thinking if it would be appropriate to use a formal termination of employment letter under redundancy grounds. Would this apply to my situation?

    I can’t actually afford to pay their salaries anymore
    given the level of income the company has at the moment. They were warned about this possible outcome at the beginning of November last year but unfortunately the situation haven’t changed a bit ever since in order for the company to keep them on payroll.

    I know I should probably consult this with a lawyer, but maybe is just not that difficult since none of them have been employed for more than 2 years and this might be a standard procedure in any company our size? Anyhow, I would appreciate any advice you could give me, given your knowledge and practical experience on the matter.

    Don’t want to be unfair, nor get in trouble by being accused of unfair dismissal, but my company cant take the hit anymore and on top of that they are not being that productive, so letting them go wont even bring any extra workload to the remaining employees.

    Thanks and appreciate your opinion
    Posted: Jan 11, 2017 By: RSS_UK Member since: Apr 24, 2011
  2. ethical PR

    ethical PR UKBF Legend Free Member

    Posts: 6,083 Likes: 1,354
    If it's under two years, just let them go. You don't need to make them redundant.
    Posted: Jan 11, 2017 By: ethical PR Member since: Apr 19, 2009
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  3. Newchodge

    Newchodge UKBF Big Shot Free Member

    Posts: 7,161 Likes: 1,811
    Call them in to see you individually. Explain that the expected increase in turnover that you anticipated when you took them on has not happened, and give them immediate notice of termination. You have to give them whatever notice is in their contract, or 1 week if there is no contractual notice period, plus their outstanding holiday pay. I would strongly recommend that you give them pay in lieu of notice, rather than expecting them to work their week's notice.
    Posted: Jan 11, 2017 By: Newchodge Member since: Nov 8, 2012
  4. RSS_UK

    RSS_UK UKBF Contributor Free Member

    Posts: 38 Likes: 3
    Thanks a lot for the quick response! Thats what I thought, but wanted to double check first. Appreciated :)

    Will definitely do. They will get what they are legally entitled. I want it to be a 'friendly' (given the circumstances) process. I know the employees wont probably see it like that, but they know I have no other choice. Thanks a lot for taking the time to help!
    Posted: Jan 11, 2017 By: RSS_UK Member since: Apr 24, 2011
  5. StevePoster

    StevePoster UKBF Enthusiast Free Member

    Posts: 800 Likes: 118
    There would be lack of professional experience in the field that's why they didn't meet the expected ROI in the company. But still implement the action legally to have decent approach for the employee.
    Posted: Jan 19, 2017 By: StevePoster Member since: Nov 29, 2013