HR procedures The first thing we try to do is to get the SME manager to look again at their decision to reduce the

headcount. It is always tempting to think the only way forward for small employers experiencing difficulties is to cut staff numbers. And we're not suggesting it's ever an easy decision to come to. But, it is the case that small employers can sometimes jump too quickly to this solution without looking at all the options or considering the need to preserve structures and talent to be competitive when the situation improves. Making redundancies - remember the long-term consequences So if you are an SME manager looking at reducing your staffing numbers as a way out of a hole, have you considered all the alternatives? Really studied them? And have you discussed them with your workforce? Even drastic contractual changes can be accepted and good working relationships maintained if you bring your people into the picture early and honestly. So it pays to have proper and meaningful dialogue and look at different options before wielding the axe. Redundancy law - get it right to stay out of trouble If you do decide you need to reduce staff numbers, the starting point is the legal definition of redundancy under the Employment Rights Act 1996. This states that a redundancy arises when employees are dismissed because of either a closure of the business, or an area of the business, or where there is a reduced need for work of a particular kind to be undertaken. In other words, to stay on the right side of redundancy law, your reasons for redundancy must relate to a position or number of positions within the business, not to an individual. If you are satisfied you have a genuine redundancy situation, you must pay affected staff redundancy pay based on the current statutory level. This is calculated based on age and the number of years an individual has worked for you. Redundancy law and the need to consult There is a legal requirement to consult with staff or their representatives if you are making more than 20 people redundant in a 90-day period. You need to consult at least 30 days before the first dismissal. If you are

planning more than 100 redundancies, consultation should take place at least 90 days before the first redundancies. If your company recognises a trade union, you must include trade union representatives in your discussions, or members of a staff council. Many employers set up a joint management and staff consultation group to consider redundancies. This group could include trade union reps, but would also include representatives of staff who are not union members. Redundancy selection criteria Objectivity is key to a fair and legal redundancy procedure. Ensure you are objective in the people you select for redundancy and don't be tempted to use redundancy as a cloak for previous management shortcomings - for instance performance issues. This is one of the key errors we see in the redundancy procedure and one that can be very costly in terms of employment tribunal claims. As well as ensuring you can objectively justify why you have selected an individual for redundancy, you should:

Consider suggestions for new or innovative ways of delivering the service from the consultation process. Ensure any new working schemes do not unduly disadvantage specific groups, for example part-time workers, those with disabilities or child care responsibilities, pregnant staff or those on maternity leave. Allow an appeals mechanism for employees to appeal decisions they feel are inappropriate, for instance, perhaps they could work in another area of the business, but have not been fairly considered for other opportunities. Give redundant staff paid time off for interviews or training.

You still need to formally consult even if you are only making one or two people redundant. And you should try to give them as much notice as possible of your intended plans. Lastly, don't forget the impact on remaining staff before, during and after the redundancy procedure. Survivor syndrome is a real and tangible issue you will need to tackle. Keep everyone fully informed of the situation and create honest and two-way dialogue that supports staff as you plan and rebuild for the future.