Summary and aim
To undertake a redundancy exercise with minimal disruption and risk to our client and to maintain the morale of the remaining employees.
Marketing software provider.
Summary of the situation and the challenge
The company had launched a software product which had not generated the income it anticipated. As a result, there was a reduced requirement for employees in the product section and the business needed to make significant cuts in order to keep the company afloat. Many of the employees had been there when the business first started and the company was concerned not to destroy morale and loyalty amongst those who would not be selected for redundancy. This was important for the stability and ongoing survival of the company; it needed to retain its best staff as it could not afford to recruit replacement employees.
- We assisted the HR team and the Operations Director with identifying the correct pools of employees. There were different roles performed at different levels within the product section, for example, junior and senior software developers, sales people and administrative staff.
- We provided the client with a guidance note to support them, step by step, through the redundancy process (including a script for a without prejudice/protected conversation as the company was contemplating offering an enhanced redundancy package) and draft letters to invite the employees to consultation meetings and notices of termination.
- To avoid creating panic and anxiety throughout the company, the client wished to select the employees by scoring them first before putting them “at risk” of redundancy to avoid informing those who were not ultimately selected that they were at risk. We advised them how best to do this to reduce the risk of a finding of an unfair process.
- The company successfully conducted the consultation meetings, fully explaining why it chose to select the employees first. The employees appreciated the transparency with which the business had conducted the process and the degree of explanation provided in respect of the redundancy situation.
- All employees accepted a slightly enhanced redundancy package under a settlement agreement which reduced the risk of claims further.
- Our client felt secure in knowing that if a settlement agreement was not accepted, it could revert to the redundancy process and dismiss the employee fairly.
- Our client managed to retain all remaining staff with good morale and is still trading.