A fair redundancy process should be followed where a genuine redundancy situation arises. Redundancy situations may be due to a reduction of the work for which the employee is engaged, where company premises are being relocated or where, perhaps, a serious financial situation is arising dictating early cuts in labour costs.

Redundancy must not be used simply as a vehicle to dismiss an employee who is proving unsatisfactory.

Wherever possible an employer should consider alternatives to redundancy such as reducing the use of agency workers, ceasing recruitment or possibly using lay off or short time working.

A full, formal and proper consultancy process should always be provided. Ideally this should be supported by documents to show:

  • How the redundancy situation has arisen
  • Outline clearly the criteria being used to select which employees are to be made redundant
  • Consideration that has been given to finding alternative employment within the company or associated companies/group

Employers should fully consult with the affected employees prior to making any selection.

Employees who are put at risk of redundancy must be given reasons why they were selected and the opportunity to challenge that selection.

Dismissals of employees should be undertaken using a proper redundancy process that complies with the Government Statutory Dispute process.

The employees being dismissed should be made aware of the various elements of redundancy pay they will receive.

Any short cuts in the pre-dismissal process can be potentially costly and could result in a successful claim at an Employment Tribunal, especially if any of the following apply:

  • Dismissal is for a spurious redundancy reason
  • Selection was based on unsound criteria
  • There was not a consultancy process
  • No alternative employment possibilities were considered

In any redundancy exercise it is crucial that advice should be taken from the advice service. Where large scale redundancies are envisaged involving 20 or more employees, the formal notification process to the Department of Trade and Industry has to be undertaken. 

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