Making redundancies in your salon business

HR Expert David Wright looks at the delicate issue of redundancy. For a variety of reasons redundancies and closures are still occurring within Salons. The basic principles of managing a redundancy situation are fairly well understood and the following checklist will act as a reminder. When you believe you may have to reduce the number of hours or a service in your business you should

• Read your  redundancy policy
• Consult with staff over the issue - don't present them with your decision, it’s called “consultation”
• Meet the staff individually, they may have questions or ideas.
• Explore all alternatives before selecting for redundancy
• Select objectively and use criteria which are legal and can be defended
• Redundancy is a dismissal so the normal rights of representation and appeal exist

Inevitably tricky situations will arise. Here is a selection of questions I’ve received over the last few months. What happens when an employee has been given notice and gets offered another job? There are several alternatives - you can agree that the employee leaves early e.g works three weeks’ notice rather than six weeks’ notice and they receive their redundancy payment. Alternatively you might require the employee to work their entire notice and write and confirm this fact and that if they leave before completing their notice they would lose their redundancy payment. The employee would have a right to pursue a claim for the payment to an employment tribunal. Realistically, the employee has been told their job doesn’t exist anymore, they have the chance of a new job to go to. What would be the overwhelming case for them to have to work the balance of their notice? Why can’t I just pick the newest person and let them go as the cheapest option? “Last in first out” was historically a favoured method of selection, but there are three issues. Firstly, your newest employee might be the best trained and top performer; secondly it’s dangerous as it could easily be seen as age discrimination if the newest is the youngest and finally a golden rule is you don't just pick someone. You consult with the staff potentially affected.  Someone might volunteer; the team might get together and all agree to drop a day, so you don't just go in and make someone redundant. If a solution can’t be found you can then select based on performance criteria, for example, average column income. Also, if the newest recruit is an apprentice, typically they are excluded from redundancy situations as they are training. Can pregnant staff be selected for redundancy and do they lose their right to maternity pay? It is a myth that pregnant staff can’t be made redundant but obviously there are additional risks and you should be 100% certain you can demonstrate the selection is not related to the pregnancy. Depending upon the stage of the pregnancy I would ask whether it is cost effective for you anyway? The employee might be just about to go on maternity leave for up to a year, they might not return, they might return part time. They are about to go on maternity leave so you will be saving their wage costs anyway. But to answer your question, if they are within 15 weeks of the baby being due they would still be entitled to be paid SMP by the employer (who reclaims the costs anyway) Do Older Workers Get More Redundancy Pay The answer is yes, and it seems another example of positive discrimination. If an employee is made redundant then the redundancy payment (after two years’ service is based on their age. So, for under 21s it is paid at half a week’s pay for each year of service; from 21 to under 41 it is one week’s pay per year, after 41 its 1.5 weeks’ pay. The weekly pay is subject to a maximum amount. From 6 April 2017, this is £489. I have selected a stylist for redundancy based on average daily column incomes and retail but she is arguing that I should have used different criteria. Should I be worried? In my view, no. You have selected criteria which are objective and enable you to rank the staff. You could even have scored the various stylists based on these criteria. An employment Tribunal might study the criteria and ask you to demonstrate how they have been consistently applied but they wouldn't normally substitute their own criteria. Its all about being able to justify your selection   David Wright advises Habia and salons across the UK. For an all-inclusive annual fee of £250, you can contact him with your employment queries. He will write your contracts and produce your policies and salon handbook. In addition. you will receive a monthly newsletter full of practical advice. Call David on 07930 358067, or 01522 831061, email sarahclark223@ntlworld.com, or visit  www.davidwrightpersonnel.co.uk.