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What You Need to Know About Redundancies in Your Construction Business

19th October 2020

Sometimes in Business it is hard to face the fact that some people are no longer an asset to your business. When they become a cost rather than investment, a decision has to be made as to what you do next? With over 35 years of Management experience, Jonathan can help you make the right decision for You, Your Team and Your Business.

This may mean you deciding on which of the 3 R’s to use:

  • Re-train and up skill
  • Redeploy to a new role
  • Redundancy

Redundancy maybe a option that suits both the employee and the business. The lump sum payout may be hard to stomach, but over the following 12 months, it is a good option; financially for the business and for your Team. 

In my latest case during the Covid-19 Pandemic, I was able to help an Engineering Company to restructure and redeploy key team members to new roles. 

For those unwilling to change or refuse to contribute to the needs of a reorganised business, were considered for Redundancy or performance managed to make that change. 

Within 6 months the company now has a bright future. 

It has reduced its operating costs and improved its performance. 

Now, if the pandemic continues into 2021 and the company only achieves the sales it did in 2020, it will deliver in excess of £200k net profit on £1million sales. 

That will be a 8x increase in its Net Profit year on year. That is a turnaround!

Good HR will deliver this as a minimum result for this Company. Add some great Marketing and your cash in the bank grows even further!

There are 3 Key Redundancy Stages:

Redundancy may be an option to scale down, reduce costs and keep your business alive to get through difficult times like the Covid-19 Pandemic.

The 3 key stages you need to be aware of when completing redundancies are:

  1. Planning 
  2. Consultation
  3. Implementation.

Stage 1: Planning

Once you have decided that your business operations need to change, do complete the following checklist:  

    • Take time out to create a new organisational chart to see who does what and where.  
    • Create a document that answers the following questions: 

– What is the specific problem you are faced with? 

– Who does that problem affect? 

– What is the solution to the problem? 

– What needs to be done to bring the required change to your business? 

– What is the time frame? How long will it take to implement the change to give you your planned outcome?

By answering the above questions, you will be able to create a plan, to take the necessary action to achieve your desired outcome. It is always easier for you to communicate a clearly thought out plan to those that will be affected.

Getting your team on board with any proposed change will always be your biggest challenge. This is best overcome by having clarity of direction and implementation, communicated in a persuasive manner.

Creating this plan is also useful evidence to justify your required business change, rather than be accused of taking a ‘Knee jerk’ reaction. 

Stage 2: Consultation

Redundancy is potentially a fair reason for dismissal. However as an employer, you must act reasonably and follow the correct procedure to keep the dismissal fair. Therefore you must enter those affected into a Consultation process. This may also include those you have planned to keep in your business. Making the consultation fair is of paramount importance. You must listen to what the affected person has to say, as they may be able to provide a solution you had not thought of, that could be of benefit to all parties.

Always make sure you have the right criteria for making someone, rather someone else redundant. 

Stage 3: Implementation

Once you have completed the Consultation process, the next step is to put the confirmation of the Redundancy decision in writing to the employee. 

Your letter for dismissal must:

– Confirm the reason for dismissal (Redundancy)

– The correct notice period or pay in lieu of notice

– The termination date of employment

– How the Redundancy payment has been calculated.

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