Making a staff member redundant

T

tricky

Guest
I have a small business open 4 years this month. I've got 2 staff members working for me, one is earning 22.5k per year and the other is earning 32.5k per year. The problem is the staff member earning the higher salary is generating less revenue for the business. like many business at the moment I really need to reduce my out goings and need to let this particular staff member go or reduce her salary significantly.
My problem is that she has worked for me the longest (4 years) and I will have to replace her when she leaves. How much redundancy will I have to pay her and will it be considered unfair dismissal if her I replace her?

Any advice would be appreciated
 
I'm afraid I don't have the expertise or experience to help you but I do know that you should get professional advice on this one.

Hints and tips on this board are very useful but this situation could cause you a lot of headaches and a crippling bill if you don't get it exactly right.

Is there a contract in place with this employee?
 
Thanks for that! I know I will be getting legal advice tomorrow but just thought I'd put it out there. No her contract was never renewed after the initial 6 month period. I've done everything to keep her on but I have found an excellent girl who would really appreciate her job. This step is necessary to save my business.
 
I didn't mean to kill your thread before it had started!

Some other points:-
You make a role redundant not the employee so if you're hiring a replacement it is not a redundancy situation.

Have you issued any official verbal or written warnings to the employee regarding their performance. If you haven't then I think it will be very difficult to legally terminate employment in the short term.
 
She had one verbal warning over a year ago. Maybe if I told her I was reducing her salary to the same as the other girl. That would be a 10k reduction which I'm sure she won't accept. Then maybe she'll leave
 
Quite dodgy raising this on an open forum as maybe the staff member in question will be able to identify herself and take legal advise !
 
jaybird said:
You can't make her redundant and then replace her with someone cheaper. You also can't inform her that you are unilaterally reducing her salary by almost one third. Neither can you use a single verbal warning from over a year ago as an excuse to sack her.
The fact that you did not renew her contract is irrelevant, after 4 years a contract exists.

You need expert advice, as a case for unfair dismissal will cost you a lot more than you are trying to save on wages.
Click to expand...

+1.

A contract exists long before 4 years but after 4 years she has in the eyes of the law a Contract of Indifinate Duration.

The absence of a contract imo means an employee has a stronger position should they decide to go to an EAT.

First thing you will be asked for is the contract of employment.
 
Have you actually spoken to her about her performance?

Have you given her an opportunity to improve?

Look at her work history with you. Is it only recently that she's been underperforming?




I would like to think that if (for whatever reason) my work wasn't up to standard, that i would at least be told.
 
You could make it quite clear to both of them that business is bad and that unless things improve then that's the end of things...
this way you haven't picked on any one of them. You've basically got your message to the expensive lazy one without making her feel resentful (which is a strong possibility if you just talk with her).
Unless you are a clever skilled motivator of people it may be hard for the girl not to feel -even subliminally- that you're "getting at her".

other suggestions - Three day week for both ? Offer voluntary redundancy (on a four weeks per year basis) to both,in hope that the dearer one will take it. It'll be worth something to her, not the cheap one who hasnt been there long. At same time tell them that if they dont want it, that's fine, but business may close and all they'll get is statutory. This may tempt the dearer one.

In the meantime make sure that you do EVERYTHING correctly. Have you issued them with details of their job, timetables, record of work9(breaks etc) -all the things that a bitter employee can get you for.....
 
OP: you really sound like a nasty piece of work, your committing some of the worst crimes that an employer can commit;
-overlooking your obligations as an employer such as an employment contract
-failing to know the 'rules' of employment such as last in first out
-wanting to move people on before giving them feedback and chance to improve and even worse finding "an excelent girl who would really appreciate her job"

I hope your solicitor gave you a good telling off and told you to pick up your game as an employer. If they didn't, then here it is (and free too!)

Good luck (you'll need it)
 
"failing to know the 'rules' of employment such as last in first out"

This is not a rule of employment!
 
Card said:
"failing to know the 'rules' of employment such as last in first out"

This is not a rule of employment!
Click to expand...

+1

Calling them a nasty piece of work is a little over the top too. If the person isn't productive there are issues.
 
jaybird said:
Somone else said "bitter employee" and wasn't picked up on it, if this person (who hasn't even a clue people are plotting her demise) is bitter she would have every reason to be from what I can see. OP neer said she wasn't productie, just generating less revenue than the other employee. There may be very sound reasons for that, it may only be slightly less, it may be the employers fault, etc. There was no implication that she is bad at her job, only that she can be replaced by someone cheaper.

And can people stop calling her (and others) a "girl"? Its really not appropriate, she is likely to be well over 18 and its unprofessional as well as belittling.
Click to expand...

The fact that the person is getting paid almost 30% more than the other and is gaining less revenue would read to me they are less productive.

OP doesn't need to state it. But I would assume they are doing the same role or comparisions would be unfair.

If there are under lying problems that is different. But we can only issue a response based on what is posted. The fact that the person already has a warning to their name as stated sways any opnion I would give on what I have read.
 
I could understand the anger if the OP had stated they had gone through with the action rather than asking advice on the proposed action.

Whatever about the OP's knowledge of Employment Law, they did the responsible and right thing in asking for advice before acting. I don't see why that should generate some of the replies it has.

From the way I read it, they were corrected on their original proposed actions and took the advice on board. Surely a victory of sorts for employee rights?

If more employers took this precaution before acting, then the workplace would be a fairer place...and mean we wouldn't need union representation too...
 
This certainly caused a heated debate!
I'm young and own my business only a couple of years and never had to think about hiring or firing till now so excuse me if I came across as "failing to know the rules of employment" !
I should have clarified the situation more but I was just looking for some feedback on the area and see if anyone could come up with any other ideas from their own experiences of dealing with a similar situation.
Thanks!
 
The OP asked for advice about the right way of doing things - no crime in that, yet some posts attack his/her way of business without any knowledge of such - That's not wat AAM is about.

As for the original query... You're in a minefield on this one.

Your statement that the need to reduce outgoings is essential for the well-being of the company allows you to look at every angle as the company is more important than any single employee. Once this is kept at the forefront of any decision it should protect you from any litigation.

It is also important that once you arrive at various options to solve your problem, they are presented to your solicitor to ensure that you are doing everything within the law.

Here's an option that may work -

Look at all the tasks you undertake and see if any of them can be contracted out - e.g. All accounting parts of the business including payroll. / Deliveries / web management.

If this can be done, do you then have the time to do many of the tasks the person you wish to make redundant does? and then possibly pass a few more onto the remaining person.

This allows you make the position redundant and if business picks up in 3 months, you could then hire someone else.
 
You must log in or register to reply here.
Back
Top