Focus: People Management - How to... manage redundancy

Even the most employee-friendly bodies sometimes have to lay staff off. Amanda Tincknell explains how to minimise the pain.

Working in a small voluntary organisation can be an insecure business - uncertain funding, scarce resources and having too much to do in too short a time are common complaints. Occasionally things crack and we need to cut back to survive.

One of the hardest things to deal with is making redundancies - especially when it involves close colleagues who have worked well together.

Knowing how to manage the redundancy process is vital if you are to avoid the legal pitfalls, ensure continuity of service delivery and minimise the stress and upset for those directly affected.

A successful redundancy programme - if there can ever be such a thing - is characterised by careful and detailed planning, a sense of empathy and extensive communication and consultation across the organisation.

Staff can often suggest solutions you had not thought of.

When those managing the exercise ask themselves how they would feel if it was happening to them, and then behave accordingly, things seem to go a lot better.

The checklist below outlines the steps you must take ifyou are making fewer than 20 redundancies in a 90-day period.

CASE STUDY 1: fixed-term contracts

A charity has four staff on fixed-term contracts because of a time-limited grant. Managers thought that making staff aware of the funding situation was sufficient. But now they think they may need to make redundancies.

So when is redundancy necessary?

Fixed-term contracts seem like a good idea when funding is uncertain.

However, legal changes give employees with fixed-term contracts for two years or more the same rights as those on permanent contracts.

CASE STUDY 2: maternity rights

A staff member who is a candidate for redundancy tells her employer she is pregnant. But do her maternity rights override the redundancy situation?

She can be considered as long as any absence or time off for dependants is not taken into account - this could be seen as sex discrimination.

As long as a fair selection process is used, a pregnant woman can be in the redundancy selection pool.

- Although every care has been taken in compiling these notes, they are intended as a guide and not as a substitute for specific legal advice.

The Cranfield Trust cannot be held responsible for any errors or omissions


- Consider alternatives: moving staff to vacant posts, for example

- Get advice: from a specialist, from other organisations that have faced similar situations, or contact ACAS -

- Plan ahead: set out an action plan of what has to be done and when - Consult: individually and collectively if redundancies are extensive

- Look for volunteers: if redundancies are not due to loss of funding for specific posts

- Select: use fair and objective criteria to select staff for redundancy - Comply: with the three-stage statutory dismissal procedure - write to the employee, meet them (with a colleague if they wish), allow appeals

- Payment: there are qualifying criteria for statutory redundancy pay.


- Support: help your redundant staff obtain training or alternative work - you must allow them time off to seek other employment

- Staying on: make sure you communicate clearly with those staying on, and work to maintain morale and motivation

Amanda Tincknell is chief executive of the Cranfield Trust (www.cranfield, which provides free consultancy to the voluntary sector through commercial sector volunteers. This article - the second in a monthly series - draws on casework and information from Dorothy Telter, a Cranfield Trust volunteer and HR consultant.

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