The economic downturn is still having a resulting effect on businesses throughout the UK. Many organisations that have historically been very profitable, are suffering from the sudden lack of credit, customers and supplies - employment law soutions. With sales dwindling or maintaining at a low level, companies are forced to reduce their spending by making staffing cuts. Redundancy, although it should be treated as a last resort and avoided wherever possible, is still in some organisations, the only option. Having said that, alternative should be explored prior to the decision to make employee redundant, as laying off talented, experienced and loyal members of staff is definitely not recommended if it can be avoided.

However, if no other option is available to you, it is important that as an employer, you are aware and fully understand your responsibilities and the legalities surrounding redundancy.

Depending  on the size of your organisation or the extent to which it is financially suffering, redundancies tend to fall in to two categories;

1)      Fewer that 20 employees are being made redundant
2)      20 or more employees are being made redundant.

Depending on which category you fall into, your responsibilities to these employees are likely to differ. The main difference in these two categories is the legal responsibility to undertake a proper consultation period.  Although this is recommended in any redundancy situation, if you are making fewer than 20 people redundant, employment law does not stipulate that you undergo this process formally.

Should you be making 20 or more people redundant, your organisation has a statutory responsibility to consult with the employees in question or their representative.  This period of consultation must begin between 30 and 90 days before the date of the proposed redundancies. Having said that, a more imminent concern for many organisations is the financial aspect of making redundancies.

This can be significant and should be compared with financial losses in other areas of the business before the decision to make redundancies is undertaken.