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Over 69% of 200 business executives believe that the UK is heading towards a recession or a serious downturn and 47% expect to make some employees redundant during 2008. If you find yourself in this inevitable situation, identify the essential priorities for your business,  i.e. those that are achievable, do not require unnecessary investment and those that will produce swift returns. Think critically about the needs of the market and focus on the things that will have the most robust financial impact before you make any knee jerk reactions to cut staff overheads. When you announce this situation it will undoubtedly have a negative effect on the remaining employees.  Whatever way it is dressed up, it will always make your employees reassess their position and your best-qualified and key people are going to feel insecure and are much more likely to look for other jobs if they feel the Company is unstable.  Don’t have a knee-jerk reaction as this can seriously affect your business in the long term. Therefore, before the final decision to reduce staff is made exhaust other avenues first, ie other vacancies or retraining wherever possible.  This is crucial as you will also need to ensure you have the skills available for the future when the downturn ends. Redundancies have to be managed well, with full communication, negotiation with staff to try to minimise the impact – not just going through the motions, as well as complying to all the relevant legislation. A fair redundancy dismissal will involve a fair selection, individual consultation and consideration of alternative employment.  The Statutory Dismissal procedure must be followed as a minimum to avoid the dismissal being automatically unfair. Consultation should be as soon as the likelihood or necessity for redundancies has arisen.  The issues on which you should consult are:

• The risk of redundancy and pool for selection
• Selection criteria and results of selection, and
• Alternative employment

You must consult with the employees whether this is individually or collectively and with appropriate representatives. The consultation should always include ways to:

• Avoiding the dismissals
• Reducing the number of dismissals, and
• Mitigating the consequences of dismissals

There are statutory consultation periods that must begin before the dismissal takes place:

• 30 days if it affects 20-99 employees
• 90 days if it affects 100 or more employees

There are no statutory timescales for fewer than 20 employees but you must ensure that proper consultation is given.  As part of consultation you can:

• Ask for voluntary redundancies
• Available suitable alternative employment
• Consider an early retirement scheme

Consultation must also precede any public announcement. If you don’t have an enhanced redundancy payments scheme, then employees who have over 2 years continuous service qualify for Statutory Redundancy Payments that are up to a maximum of £330 per week. This is only given as a short overview and guide.  You should never undertake a redundancy process without first ensuring that you can manage redundancies and also taking professional advice.