Research conducted by law firm GQ Littler has revealed that the number of planned redundancies in the UK increased by a remarkable 15% between 1 August 2022 and 31 October 2022. With the sudden increase in high profile mass redundancies at large companies including Twitter and Amazon, our employment team has outlined how to recognise the signs that your role could be at risk of redundancy and the steps you can take to protect yourself.
Why the sudden rise in redundancies?
The recent increase in redundancies is linked to several factors, most notably the rising cost of living and the lingering effect of the Covid-19 pandemic, as well as the war in Ukraine. As rising energy costs continue to impact business profits and customer spending, companies are being forced to consider how to cut costs and operate more efficiently. Unfortunately for employees, often the simplest way to do this is to cut jobs. Although there are strict rules about when and how employers can make redundancies, understanding how to spot the early signs that redundancies might happen will help protect your position as best as possible.
What are the signs that your employer might be making redundancies?
• Your industry is struggling: If employees with similar roles in competitor companies are being made redundant, this may indicate that your industry is facing challenges.
• Reduced spending in the office: There may be obvious indications that your employer is trying to cut costs e.g., your employer has implemented pay or recruitment freezes or they have reduced discretionary bonuses and perks.
• Changes to your role: Certain changes to your role may indicate that your role is at a higher risk of redundancy than others. For example, if your workload suddenly decreases or you are taken off larger client accounts.
• Quiet firing: Many employers are thought to be trying to avoid costly redundancy processes by resorting to ‘quiet firing’ tactics. This involves making an employee’s working life as unpleasant as possible in order to try and induce them to resign voluntarily.
What should you do if you think you could be at risk of redundancy?
1. Preparation is key
If you think you could be at risk of redundancy, get a head start by updating your CV. Not only will this put you in a good position for looking for new jobs, it will also give you the opportunity to reflect on your key skills, achievements and responsibilities. This information will be invaluable when it comes to demonstrating your strengths and the value you bring to the organisation during any redundancy consultation meetings.
2. Know your rights
Redundancy processes can be daunting. However, equipping yourself with knowledge about your employer’s legal obligations and your rights during a redundancy process is key to protecting your position.
If your employer announces that they are exploring the option of redundancies, the first step is to ensure that there is a genuine redundancy situation. A genuine redundancy is when a business is closing or relocating, or there is a reduction in the number of people required to carry out a certain role. If you don’t think there is a genuine redundancy situation, or you think that you are being singled out for a discriminatory reason (e.g., if you are pregnant), it’s important to obtain legal advice straight away.
During the redundancy process, employers are obliged to follow a fair process. A failure to do so could result in any subsequent dismissal being deemed unfair. A fair process will likely involve genuine and meaningful consultations with you about potential redundancies and how to avoid them. Employers should also use an objective criteria to select employees for redundancy. This might include skill and experience levels or disciplinary records.
3. Make the most out of the situation
If your employer offers voluntary redundancies, consider whether this would be a beneficial option for you, particularly if you have already found a new role. However, before you accept voluntary redundancy, it is important to reflect on whether the terms are more favourable than the terms that would be offered to you if you were made redundant involuntarily. It is also important to consider whether you would miss any bonus payments or share awards by accepting voluntary redundancy.
If you do not accept voluntary redundancy and you are made redundant, many employers will opt to offer you a settlement agreement, whereby you receive an enhanced redundancy payment in exchange for waiving your right to bring any claims against your employer in the future. Most of the time, the terms of the settlement agreement are open to negotiation, including the terms relating to the compensation payment, shares and references. For a settlement agreement to be legally binding, you will need to receive independent legal advice from an employment lawyer. In this situation, we strongly recommend contacting an employment lawyer as soon as possible. In addition to advising you on the terms of the settlement agreement, they can assist you with negotiating the terms of the settlement agreement. By involving an employment lawyer early on in the process, they can help make sure that you walk away with the best possible outcome.
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