A Guide to Redundancy

Redundancy is a painful process for both the employee and the employer. It is a decision that many businesses seek to avoid but sometimes a restructure of the organisation or reducing the number of roles is necessary.
Redundancy occurs where an employee is dismissed for reasons such as:

1. Employer ceasing business
2. Requirements of the business have changed
3. Employer requires less employees
4. Change in work systems (mechanisation etc)
5. Role amalgamation

It is essential when roles are being made redundant the selection and consultation process is fair and objective and those employees who are selected are done so in a transparent and fair manner. Most third-party claims in relation to redundancy are often based on the selection process.

Selection
There are two broad methods of selection for redundancy:

1. Last in First Out
2. Selection matrix: objectively selects employees for a redundancy based on a compiled score of their skills, knowledge, and other relevant criteria. The criteria must be as objective as possible, which should only be based on facts which have been documented and/or raised to the employee prior to the redundancy.

Employers would be bound by the precedent for redundancy selection in the company or agreed mechanisms between a union and the company. It is imperative that businesses are aware of the following two points:

• Custom and practice – what did the company do in previous redundancies if any?
• Agreed procedure – is there a precedent or an agreed procedure in place? This is more commonly seen in unionised work environments.

In terms of the recommended process, employers should make an announcement to the employee(s) – advise them they’re ‘at risk’ of redundancy, explain why this is happening and inform the employee you will then be entering into consultation with them.

Consultation

• Consultation meetings should be arranged with the employee(s), an employee is entitled to bring representation i.e., colleagues/external union official.
• During these meetings it’s important to give the employee(s) an opportunity to have their input/say into the situation.
• Consider proposals for alternative roles/options – implement if feasible.
• If there is no alternative roles/no other viable options – you are looking at proceeding to termination – and give notice of redundancy.
• Ensure notes are taken at each meeting and request that the employee(s) sign these to confirm they are an accurate reflection of the items discussed.
• Consider offering a right to appeal the redundancy decision.
• Redundancy process should not be rushed - there should be at least a minimum of two weeks for consultation.