The UK redundancy process isn’t just about following procedures—it’s about managing the process with care, fairness, and full compliance with employment and immigration laws.
For employers with sponsor licences, the stakes are particularly high, as any missteps could not only affect their employees but also jeopardise their ability to sponsor workers in the future.
This comprehensive guide walks you through the redundancy process in England, with special attention to the additional responsibilities and considerations for employers with sponsor licences.
Whether you’re considering redundancies or simply want to better understand your obligations, this guide will help you navigate the complexities of the process while maintaining compliance with both employment and immigration regulations.
Identifying the Need for Redundancy
The employer must first identify the need for redundancy, which could be due to various reasons, such as a downturn in business, restructuring, or technological changes.
The employer is required to consult with employees who are at risk of redundancy. The consultation process can take a few forms, including:
- Individual Consultation: For fewer than 20 redundancies, individual consultation is required. This involves discussing the reasons for redundancy, exploring alternatives, and considering any employee suggestions.
- Collective Consultation: If 20 or more employees are to be made redundant within 90 days, the employer must engage in collective consultation with employee representatives or trade unions.
The time frames for collective consultation are at least 30 days before the first dismissal if 20-99 employees are affected, or at least 45 days before the first dismissal if 100 or more employees are affected.
Selection Criteria and Notification of Redundancy
The employer must use fair and objective criteria to select employees for redundancy. Common criteria include skills and qualifications, performance records, and attendance records. The criteria should be applied consistently to all affected employees.
Employees must be formally notified of their potential redundancy. This notification should include the reasons for redundancy, the consultation process, selection criteria, and support available.
Legal compliance in redundancy procedures is governed by two key pieces of legislation.
The Equality Act 2010 prohibits discrimination based on protected characteristics such as age, gender, race, disability, and other protected statuses when selecting employees for redundancy.
The Employment Rights Act 1996 requires that the process be conducted fairly and transparently, with clear documentation and consistent application of selection criteria throughout.
Providing Redundancy Support
Employers can provide various forms of support to employees facing redundancy, including:
- Outplacement Services: Job search assistance, CV writing, and interview preparation.
- Counselling Services: Emotional support and stress management.
- Training and Development: Skills enhancement and retraining opportunities.
- Financial Advice: Redundancy pay information and financial planning.
- Job Fairs and Networking Events
- Legal Advice: Employment rights and settlement agreements.
- Internal Job Opportunities: Suitable alternative roles within the organisation.
- Consider offering flexible working arrangements during the notice period.
Key Time Frames
- Individual Consultation: No specific legal time frame, but should be reasonable and sufficient to discuss the redundancy.
- Collective Consultation:
- At least 30 days for 20-99 redundancies.
- At least 45 days for 100 or more redundancies.
- Notice Period: Depends on the employee’s length of service, typically:
- At least one week’s notice if employed between one month and two years.
- One week’s notice for each year if employed between two and 12 years.
- 12 weeks’ notice if employed for 12 years or more.
Types of Redundancy Pay
Employees who are made redundant are entitled to redundancy pay, which includes:
- Statutory Redundancy Pay: Based on age, length of service, and weekly pay.
- Notice Pay: Payment in lieu of notice if applicable.
- Accrued Holiday Pay: Payment for any accrued but untaken holiday.
The Redundancy Appeal Process
Employees should be allowed to appeal the redundancy decision if they believe it is unfair.
After the consultation period and once the final decision is made, the employer must issue a formal notice of redundancy. The notice period will depend on the employee’s length of service and the terms of their contract.
Additional Considerations for Employers with a Home Office Sponsor Licence
If an employer holds a Home Office sponsor licence, there are additional steps and considerations to take into account during the redundancy process. These steps ensure compliance with immigration laws and the conditions of the sponsor licence.
Notification, Selection and Record-Keeping Requirements
The employer must notify the Home Office if a sponsored worker is made redundant. This notification should be done via the Sponsor Management System (SMS) within 10 working days of the redundancy decision. The notification should include:
- The reason for redundancy.
- The last working day of the sponsored worker.
- Any other relevant details as required by the Home Office.
When selecting employees for redundancy, the employer must ensure that the process is fair and non-discriminatory. Sponsored workers should not be unfairly targeted for redundancy due to their visa status.
Maintain accurate records of the redundancy process, including the notification to the Home Office and any communications with the sponsored worker. These records should be kept for at least one year after the end of the sponsorship.
Employers must continue to comply with right-to-work checks for all employees, including those at risk of redundancy. Ensure that all sponsor duties are adhered to, including reporting changes to the sponsored worker’s employment status and maintaining accurate records.
Providing Support and Guidance
If there are suitable alternative roles within the organisation, the employer should consider offering these roles to the sponsored worker, similar to other employees. This is particularly important if the sponsored worker is on maternity leave, as they have enhanced rights to be offered suitable alternative employment.
The employer should inform the sponsored worker about the impact of redundancy on their visa status. Redundancy may lead to the curtailment of their visa, and they may need to leave the UK or find alternative employment with a new sponsor. The employer should provide support and guidance on this matter.
Consequences of Failure to Notify the Home Office
If an employer with a Home Office sponsor license fails to notify the Home Office about a redundancy involving a sponsored worker, there can be several serious consequences.
- Revocation or Suspension of Sponsor Licence
- Civil Penalties
- Reputational Damage
- Impact on Sponsored Workers: Visa curtailment and uncertainty.
- Legal Action: Potential legal action from the sponsored worker.
- Increased Scrutiny: From the Home Office.
- Loss of Trust: Between the employer and employees.
Conclusion
Managing redundancies while holding a sponsor licence requires careful attention to both employment and immigration law requirements.
The consequences of mishandling redundancies, particularly when sponsored workers are involved, can be severe – from potential discrimination claims to the loss of your sponsor licence. However, with proper guidance and careful adherence to the procedures outlined in this guide, you can navigate the redundancy process effectively and compassionately.
At Tann Law Solicitors, we understand the complexities of managing redundancies while maintaining sponsor licence compliance. Our experienced team can provide expert guidance throughout the entire process, helping you:
- Navigate the consultation requirements.
- Ensure fair selection criteria.
- Maintain proper documentation.
- Meet Home Office notification deadlines.
- Support affected employees, including sponsored workers.
If you’re considering redundancies or need advice on managing your sponsor licence obligations, don’t navigate these complicated waters alone.
Contact Tann Law Solicitors today for a consultation. Our team is here to help you handle this sensitive process with confidence and compliance.
📞 Call us: 07915070549
✉️ Email: info@tannlaw.co.uk
🌐 Visit: https://tannlaw.co.uk/contact-us/
Let us help you protect your business while treating your employees fairly during this challenging transition.