Dealing with redundancy can be daunting for both employers and employees. Employers need to ensure that they follow correct procedures and apply them fairly. Employees have a number of rights in a redundancy situation and both parties need to understand what these are.

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Broadly speaking, redundancy is used to describe a situation in which an employer decides to reduce the number of its employees. An employer may decide to make redundancies for a variety of reasons, including:

  • Recession or other economic pressures making business closure or reduction in staff numbers necessary
  • Changes in the nature of products or services provided
  • Internal reorganisation to make more efficient use of roles and duties
  • Technological developments resulting in a change to some or all job functions
  • Relocation of business

 

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Employers need to know:

  • What “redundancy” means
  • When they must inform and consult collectively (with trade unions or employee representatives) about redundancy
  • How to deal fairly with individuals being considered for redundancy so as to minimise claims for unfair dismissal
  • What the alternatives to redundancy are, including lay off and short-time working
  • How to determine an employee’s entitlement to a statutory or contractual redundancy payment

Employees who are dismissed by reason of redundancy may be entitled to a statutory redundancy payment.

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