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How to Use a Redundancy Business Case

November 2023

Redundancy Business Cases

Redundancies are difficult and stressful for employees and employers alike and, in order to avoid potential claims, employers must ensure they follow a full and fair redundancy consultation process from the outset.

Before embarking on a redundancy process, it is essential for the employer to ensure that they have a sound business case underpinning the redundancy proposal. 

The redundancy business case document is central to the consultations that follow and should include:

  • Information about the redundancy proposal and the affected employees
  • The reason for the potential redundancy e.g. a role is no longer needed because of changing processes/new technology, or there is a need for the business to cut costs
  • The link between the business situation and the redundancy proposal
  • Alternatives to redundancy that the employer has considered, such as reducing external recruitment and banning overtime.

In any redundancy business case, the key is for the employer to focus on the role, rather than the individual employee and to demonstrate that one of the legal definitions of a redundancy situation applies.  The reason for the redundancy must be, therefore, that the company is:

  • closing, or has already closed
  • changing location, or
  • changing the types or number of roles needed to do certain types of work.

The affected employees must also be clear from the outset that this is a redundancy proposal and no final decisions will be made until the consultation process is complete. 

This month, a Redundancy Business Case has been added to the comprehensive range of redundancy-related documents designed to guide employers through the complexities of a redundancy consultation process from start to finish. Redundancy is, by its nature, process-driven and these documents can help you stay on track. The redundancy documents can be found here.

The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

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