Unfortunately in December and January there tends to be a surge in the number of redundancies being carried out, due to poor trading conditions or in an effort to balance a budget in the lead up to a new year. With the decline of the Celtic Tiger and the prolonged recessionary period it is safe to say that the majority if not all businesses have had to cut costs and unfortunately redundancy often forms a part of those cost cutting measures.
Importantly, it is absolutely fine for an employer to make redundancies where there is a business need and, indeed, redundancy is recognised as a fair reason of dismissal in the Unfair Dismissals Acts. However, this does not mean that every redundancy is fair and a tribunal will award unfair dismissals to an employee if they have concern with one of the following three matters:
1. There wasn’t a genuine reason for making the role redundant
The most important issue from the outset is that it is the role that is being made redundant and not the person. A person should only be made redundant where there is a genuine redundancy ground and it should not be for any other reason such as that person’s conduct, personal difficulties etc. The focus, therefore, with redundancy is on the work rather than the people carrying it out.
2. The employee was unfairly selected for redundancy
It is important to be aware that an employee must be fairly selected for redundancy. Thus, if you have a requirement for redundancy in a particular department then all employees who do the same or similar work ought to be considered in the redundancy process. There are two generally accepted methods of selecting a person or persons for redundancy from a larger group, namely last in first out (LIFO) or a skills selection matrix. Importantly, whichever selection method you use ought to be fair and reasonable and is compliant with the company’s own redundancy policy.
3. The procedure followed in making the employee redundant was unfair
It is important that an employer engages in a redundancy consultation process with the affected employee(s) before reaching the definitive conclusion to make the employee(s) redundant. The purpose of such consultation is to analyse whether or not there are any possible measures which could be introduced as an alternative to making any employee(s) redundant.
Therefore, it is important for employers to be wary of the Do’s and Don’ts as a guide for when you have to take the dreaded step of effecting redundancies in the workplace. If done properly, the redundancy process can make your business leaner and fitter and better equipped to prosper in the economic downturn.
The Redundancy Process
- Do explain the rationale for redundancies and why you believe redundancy may be necessary
- Do explain steps taken to date by the employer to avoid redundancies
- Do consult with all staff at all stages before making any decisions
- Do consider any alternative suggestions put forward by the employees
- If you are using a selection method for selecting individuals for redundancy then Do secure agreement to this selection method from the outset and the criteria being used.
- Do use objective selection criteria
- Do avoid potentially discriminatory criteria
- Do outline any alternative vacant roles within the business to the employee(s), even if you believe the role to be unsuitable for the employee(s).
- Do ask the employees if anyone is interested in voluntary redundancy
- Don’t make decisions based on the individual
- Don’t use redundancy to deal with capability/conduct issues
- Don’t use subjective selection criteria
- Don’t make any redundancy decision before speaking to and consulting with staff
- Don’t limit the details of alternative roles