How do you follow a fair redundancy process when reduced funding affects many posts across a team?

ACAS sets out the fair and lawful redundancy process you should follow where reduced funding may result in roles being at risk of redundancy.  My previous blog gives top tips for following a fair redundancy process.  It is important to consult in a meaningful way with employees affected, as soon as reasonable, to consider how to avoid or mitigate risk of redundancy.

If we are restructuring because we need to reduce costs and staff numbers, do we have to offer internal interviews before going to external recruitment?

Part of a fair redundancy process is to consider suitable alternative employment for those at risk of redundancy.  Those ‘at risk’ employees should be offered suitable vacant/new roles ahead of these roles being advertised externally.  Where possible, the redundancy process should be completed before any roles are advertised externally, unless the new roles are not considered suitable alternative employment by the organisation and/or the affected employee(s).

Is it correct that fixed term contracts for under two years in total are not subject to redundancy procedures?

Any fixed term contract that expires as a result of the end of funding or the need for the role has diminished or ceased, should be subject to the redundancy procedure, irrespective of the length of the fixed term contract.

The end of a fixed term contract would be considered a dismissal, and if the employee had two years’ service the employer needs to show that there is a ‘fair’ reason for not renewing the contract (e.g., if they were planning to stop doing the work the contract was for).

The employee would also be entitled to a written statement of the reasons for not renewing the contract after two years’ service.

After two years’ service, the employee would be entitled to statutory redundancy pay if the reason for the expiry of their fixed term contract was redundancy.  How to calculate SRP can be found here.

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