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REDUNDANCY AND THE ACAS CODE OF PRACTICE
May 2009
Unlike the old statutory dismissal procedures, the new ACAS Code of Practice does not apply to redundancy situations. So from now on what will tribunals be looking for when deciding whether or not this type of dismissal is fair?
New regime
Prior to April 6 2009, employers had to follow the much loathed statutory dismissal procedures when making redundancies. But as you know, they have now been consigned to the history books and replaced by the new voluntary ACAS Code of Practice (the Code)
Not applicable here
However, the Code expressly states that it does not apply to redundancy dismissal situations. This is a little unusual, as employees can still bring an unfair dismissal claim following a redundancy, e.g. if they think they were unfairly selected.
What to do. So does this then mean that if you are in the position of having to make redundancies that you don’t have to follow any procedures at all?
Tribunal decisions
Unfortunately, this is not the case. Although the Code itself does not come into play during the redundancy process, tribunals will still expect employers to act fairly throughout. This is because compulsory redundancies should be the last resort. So if you are presented with an unfair dismissal claim by a disgruntled employee, what will a tribunal be looking for when deciding if their redundancy was fair? Most certainly it will consider whether:
- Those at risk of redundancy were properly consulted. Where 20 or more employees are involved, the tribunal will expect the statutory consultation periods to have bee properly followed
- A fair and transparent selection process was used, both in terms of the pool of employees chosen, and the redundancy selection criteria/ / used to assess them
- The possibility of any suitable alternative work was properly explored. This must be throughout your entire business and not just at the location or department where the affected employee works
- Sufficient steps were taken to avoid redundancies altogether, for example job sharing, part-time working or reduced hours
Tip. Never assume that an employee will turn down a job because it’s a lower salary or will involve moving house. You will be in a stronger position if you offer it and it is refused than if you say nothing at all.
Act reasonably
Case law in this area has yet to develop, now that statutory procedures have gone. But it goes without saying that tribunals won’t look kindly on employers who appear to be going through the motions. Although employers don’t have to follow the Code, you are still expected to act reasonably throughout any redundancy process.
Tip. A redundancy policy will be a valuable tool here. It can clearly set out the procedure you will follow and what employees can expect from you during the redundancy process.
You are not obliged to follow the ACAS Code of Practice when contemplating redundancies, but you must act reasonably and follow a fair procedure, ie. proper consultation and investigate alternatives to redundancy. A redundancy policy will help to explain the process to employees.
Source: Tip & Advice Personnel 29 May 2009
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