offering voluntary redundancy to staff

[david_now]

Hi,
I have been running a small business (ltd company) for about 6 years and have 2 PAYE employees.

They are the only two employees I have ever had , one has been with me 6 years the other about 3 years.

They are both good employees and we have a good employer / employee relationship.

I have never dismissed anyone or had anyone resign.

There is no payroll, HR or admin department, just me managing things.

Unfortunately , I have little work for them at the moment and may have none in the near future.

The employees are aware of this and I am looking at my options to make the positions redundant.

I have read about the statutory redundancy pay that they are entitled to. I am comfortable with those costs and I am able and willing to fund it.

My question is how best to handle this.

The process for compulsory redundancy appears complex to me.

I would prefer to first offer voluntary redundancy and I may consider offering a small premium above the statutory requirement to achieve this in an expeditious and hopefully amicable manner.

Do I need to do anything in the way of justifying redundancies before inviting them to apply for voluntary redundancy ?

Are there any templates available for invitations and offers out there ?

Thanks in advance

 

[TheHRPlace]

Dear David

As an HR freelancer I would say just make sure you are following procedure as that's where most employers trip up.

Once you have identified the need for redundancies and undertaken careful planning, offering a voluntary redundancy package and seeking willing redundancy volunteers could avoid the need for compulsory redundancies.

The minimum processes for redundancy are:

• planning
• identifying the pool for selection
• seeking volunteers
• consulting employees
• selection for redundancy
• appeals and dismissals
• suitable alternative employment
• redundancy payment
• counselling and support.

 

[Jeff Nev]

David,

My condolences that you are experiencing issues, this is a local employment solicitors to me that has numerous employment resources that are incredibly useful and have been of great assistance in the past for clarifying such issues for acquaintances of mine - https://www.ms-solicitors.co.uk

I hope that it proves to be useful and I wish you all the very best.

- Jeff

 

[Newchodge]

With 2 employees the process is simple. Invite them together to a meeting and explain the difficulties faced by the business. Be honest and transparent. Ask if they have any suggestions that may improve matters. Explain that, in the circumstances your only real option is to make them both redundant. Explain what they will receive in compensation which will be at least statutory minimum redundancy, tax and NI free, anything you want to add on top of that, also tax free, full notice pay (which you do or do not want them to work) and all outstanding holiday pay which are subject to tax and NI. If either of them has already taken more holiday than their pro-rata entitlement and your contract allows you to recover the overpayment, you may want to consider not recovering it.

When everything is clear and dates are decided on, put it all in writing. If you are paying anything over statutory minimum you may want them to sign a compromise agreement that prevents them taking an unfair dismissal claim. You would have to pay to get it properly drawn up and you would have to pay their legal costs in getting formal advice about signing away their rights. Without that legal advice the agreement is worthless.

Asking for volunteers is really only sensible in a larger organisation when only some of the staff will be going. Also some payment protection insurance may be awkward about paying if someone volunteers for redundancy. I'm not sure how the Job Centre views it, but it may also interfere with getting state benefits.

Of course if, in that first discussion, they come up with ways to save the business, job done!

 

[david_now]

Many thanks for that advise.

Are there any templates for letters out there that you're aware of ?

 

[Newchodge]

Many thanks for that advise.

Are there any templates for letters out there that you're aware of ?

Not that I am aware of - my role is to write the letters!

 

[Employment Law Clinic]

Many thanks for that advise.

Are there any templates for letters out there that you're aware of ?

From Northern Ireland's Labour Relations Agency, but should be fine:
https://www.lra.org.uk/images/publications/redundancy_letters-2.pdf


Karl Limpert