Perhaps the most obvious alternative is to seek volunteers for redundancy. Some employees may, depending on their particular circumstances, welcome voluntary redundancy and the payments which will be made as a consequence. Often as an incentive for employees to apply for voluntary redundancy, enhanced terms are offered.
In a previous update we gave an overview of the law and emphasised the importance of proper planning prior to declaring a redundancy situation.
Before declaring a potential redundancy situation, it is worth remembering that there can be a number of alternatives to making compulsory redundancies.
Indeed, if alternatives to redundancy are not considered, as part of meaningful consultation with the affected employees, it is likely that an Employment Tribunal will find any subsequent dismissal on the ground of redundancy to be unfair.
Assuming that an employee who is dismissed is paid all statutory and contractual entitlements due on termination, the maximum amount of compensation that an Employment Tribunal can award, in most circumstances, is £66,200. Please note that the statutory cap of £66,200 does not apply to unfair dismissals where the employee is dismissed unfairly or is selected for redundancy for reasons connected with Health and Safety or for making a Public Interest Disclosure.